The venture capital funds (VC) have traveled their billions to cybersecurity startups in the last three months of 2024, even if the number of agreements has dropped, according to new Pitchbook data.
The specialist in capital market data said in his Q4 2024 Information security VC trends Point out that $ 3.5 billion was invested in the sector in the period, in North America and Europe.
This represents a growth of 35% in annual sliding (yoy) and an increase of 44% compared to the previous quarter.
However, the number of transactions in T4 2024 was 203 – down 11% compared to the previous quarter and 15% in annual sliding.
“This suggests a trend towards larger but lower transactions, perhaps indicating that investors focus capital on better quality or subsequent stage opportunities,” noted the report.
Find out more about cybersecurity investment: the government offers startups 500 million pounds sterling of financing options
Overall, $ 13 billion was invested by venture capital companies in cyber-startups in 2024, up 8% compared to the previous year. However, the number of offers fell 13% per year to 910. The market has a long way to go before it reached the recent heights of 2021, when $ 28.1 billion was invested in 1396 transactions.
The market in general seems to be more opposed to the risks these days, hence the move to the financing of the subsequent stage of more mature cybersecurity companies. Late stages transactions captured $ 5.1 billion in 2024 against 2.7 billion early dollars, $ 1 billion in the seed stadium and $ 4.3 billion growing from the company, said Pitchbook.
Interestingly, data security startups dominated last year, receiving $ 1.7 billion out of 27 transactions, followed by final points security ($ 628 million out of 22 offers).
“This suggests that increasing business safety threats and increasing regulatory compliance trends shape investors’ priorities in the sector,” the report.
A government report this week revealed that the dedicated British cybersecurity companies collected 206 million pounds in 2024 in 59 agreements – a drop of 24% in annual shift and a decrease of 17% in the number of transactions.
“Since 2022, external investment in private companies has reduced all sectors, as interest rates have increased and assessments at companies have been revised,” noted the report.
“The research team noted that the Landscape of Investments in British cybersecurity is largely similar to the 2018/19 levels, which can reflect a” return to normal “, rather than a significant loss of confidence or commitment of investors.”