VC deals in security technology space reached 375 in 2018

The number of venture capital (VC) deals in the security technology space reached 375 in 2018 vs 322 deals in 2017.
VC funding in security technology companies
Of these, 313 deals disclosed funding value of around $5 billion vs $4.3 billion from 264 deals in 2017.

Low value deals with investment of <=$10 million dominated VC investments with 57.5 percent share in 2018.

There were relatively fewer high value deals with investment of >$100 million in the security technology space as compared to other emerging technologies such as artificial intelligence, Internet of Things and payment technologies.

“With cyber-threats increasingly posing challenges, there are opportunities for companies offering innovative solutions in the cybersecurity segment,” Aurojyoti Bose, financial deals analyst at GlobalData, said.

Companies are considering automation and AI-based cybersecurity solutions. Microsoft in February 2019 launched Azure Sentinel, an AI-based cybersecurity solution. Palo Alto Networks also introduced its AI-based security platform, Cortex.

Another challenge is security companies’ inability to maintain returns. F-Secure posted dip in its net income from EUR11.1 million in 2017 to EUR0.8 million in 2018. Sophos Group reported increase in net loss from $46.7 million in 2017 to $60.9 million in 2018. Palo Alto Networks reported net loss of $216.6 million in 2017 and $147.9 million in 2018.

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