Cyber Leak? Cybersecurity Funding Falls 63% In Q2
In 2021, venture funding in the red-hot cybersecurity market topped $23 billion. Two years later, it seems like a security startup will be lucky to raise just one-third of that.
Venture funding for cybersecurity dropped to just slightly more than $1.6 billion in the just completed second quarter — a 63% drop from the same quarter last year when startups saw nearly $4.3 billion, per Crunchbase data.
The number marks its lowest point since the last quarter of 2019, when startups raised just under $1.6 billion.
The numbers for the first half of the year are also a stark contrast to just one year ago. For the first six months this year, cyber startups raised only $4.3 billion, a drop of 60% from the $10.8 billion raised in the first half last year. It also is more than $2 billion less than the $6.4 billion raised in the second half of 2022.
These numbers are just the latest reminder of how dramatically the venture capital environment has changed in just 24 months.
In 2021, companies of all shapes and sizes were able to raise — early, middle or late — large growth rounds seemingly at will. The market has now shifted as private investors copied their public counterparts and are looking for companies that can get to at least cash-flow break-even quickly and efficiently.
That has caused funding to significantly slow, as deal volumes and dollar amounts have plummeted in all sectors, although it is extremely stunning in the once high-flying cyber sector.
Source: Crunchbase