December 2014

Three white-hot areas for cybersecurity investors in 2015

  |   Allegis News, The Latest

December 22, 2014
Bob Ackerman, Allegis Capital 

The global security market was little more than a cottage industry in 2002, when it was an insular $3.5 billion market dominated by just five vendors. Fast-forward to today and there is — I estimate — $87 billion being spent in 2014, while that number should increase to $120 billion by 2017, according to AGC Partners . What’s more, venture investment in cybersecurity startups is red hot. In the second quarter of this year, security startups took in $767 million in financing, according to CB Insights. That’s more than any other quarter in recent history. In 2013, VCs bankrolled 230 security startups, and even more are getting funded this year.

But not all security startups are created equal. As investments and budgets increase, two distinct approaches to cybersecurity are emerging. The first is aimed at protecting the legacy of the past; the second is dedicated to developing technology that’s inherently secure for the future. Strategies that protect the legacy focus on the gaps, holes, and vulnerabilities in today’s IT infrastructure, the majority of which is based on a 45-year-old architecture.

 

As a venture investor, I’m interested in both areas. That said, there is a lot more growth in solutions and technologies that are focused on safeguarding the future. I’m intrigued by new technology platforms that are secure by design, by technologies that are truly impregnable, not technologies that close existing gaps.

 

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