- Cybersecurity investing hit an all-time high in 2020 with over $7.8 billion of checks written.
- Investors are focusing on angel, seed, and early-stage rounds, aiming to get in on the ground floor.
- Insider asked five plugged-in investors about key trends and their top startups in the sector.
- See more stories on Insider’s business page.
The cybersecurity market is booming like few other sectors of investing. Venture capitalists poured more than $7.8 billion into the cybersecurity industry globally in 2020, setting a new record. PitchBook, the startup analyst company, estimated the overall value of cybersecurity startups in 2020 at $148.2 billion, and projected that figure to swell to $206.9 billion by 2024.
Yet the geeky, highly technical industry, aswirl with hype and jargon as big hacks make headlines, can be tough for outsiders to make sense of. That means they may miss out as investors rush to get in on the ground floor of a crop of new startups. And they are rushing.
Investors are vying to make early deals with emerging startups — 45% of the investments made in cybersecurity in 2020 went to angel, seed, and early-stage rounds, compared to 35% of the investments in the overall market, according to startup database Crunchbase.
But where will that growth happen? PitchBook sees trends in automated tools that hunt down hackers, security for “edge computing” in cloud servers that are physically closer to where users are, and developer security building safer code to prevent security issues.
Those big trends are good to know, but we wanted to see where investors put their own cash.
Insider spoke with five investors in cybersecurity to get their thoughts on the sector, top trends, and the startups in their portfolios that they particularly like. Below are the investing tips of Ted Schlein of Kleiner Perkins, Rebecca Gevalt of Dcode Capital, Oren Yunger of GGV Capital, Thomas Krane of Insight Partners, and Arun Mathew of Accel Partners.