Close to $10 billion was invested in privacy and security companies in 2019, an all-time high in the last decade up more than five-fold from $1.7 billion in 2010.
Seed and early-stage deals represent 44 percent of invested dollars ($4.4 billion) with Series C+ and larger rounds at 56 percent ($5.5 billion) of all dollars in 2019. The growth in funding year over year is attributable to Series C+ and larger rounds adding $1 billion.
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Some of the largest rounds in 2019 include:
- KnowBe4, based in Clearwater Florida, a platform for security awareness training, raised a $300 million Series C.
- Rubrik, based in Palo Alto, California, a data protection and management company raised a $261 million Series E.
- 1Password, based in Toronto, a secure password manager providing businesses a safe way to share passwords, raised $200 million in a Series A.
- OneTrust, based out of Atlanta, Georgia, is a privacy management and marketing compliance technology that helps organizations comply with global regulations like GDPR, raised a Series A of $200 million.
Year-over-year deal counts are down by a quarter, but will lessen over time. Much of the difference in funding round counts are attributed to the seed stage–down 40 percent–where we see the most reporting delays. We fully expect these numbers to go up during 2020, but not supersede 2018 round counts of 1,100. Reporting delays for funding amounts are less pronounced in Crunchbase data.
In our analysis over the last five years we found the five top countries for privacy and security investments include the United States, China, Israel, Great Britain and Canada in that order. For 2019, Israel jumps to the second spot after the U.S.
Top Exits In 2019
There were 85 venture backed privacy and security companies acquired in 2019 exiting at $4.8 billion. The largest exits of 2019 include Shape Security, a company providing defense against malicious attacks, which was acquired by F5 Networks for $1 billion. And Recorded Future a threat intelligence firm was acquired by Insight Partners for $780 million. The most active acquirers are Palo Alto Networks with five acquisitions and Akamai Technologies with three. Cisco, Fortinet, Mastercard, Microsoft, Proofpoint and VMWare all acquired two companies in this space.
Venture-Backed IPOs In 2019
Six venture-backed companies in privacy and security went public in 2019. They include California-based CrowdStrike, Cloudflare and Fastly. Also included are Denver-based Ping Identity, Boston-based Tufin and Mumbai-based Affle.
Leading Investors In 2019
Leading investors in security companies include established venture firms Bessemer Venture Partners, Accel, Battery Ventures, LightSpeed Venture Partners, Vertex Ventures, CRV, Kleiner Perkins, Norwest Venture Partners and Scale Venture Partners. Growth-stage investors include Insight Partners, Goldman Sachs and ClearSky. Corporate investors are also active in this category with Bain Capital Ventures, Dell Technologies Capital, Intel Capital and Salesforce Ventures. TenEleven Ventures and ForgePoint Capital are uniquely placed as firms specifically focused on cyber security investments.
Crunchbase will be at RSA 2020. You can find us at “How-To For Innovators” on Feb. 24, 2020.
Based on Crunchbase data, companies exhibiting at RSA 2020 have collectively raised $3.8 billion in 2019.
Analysis is based on data in Crunchbase as of Jan. 28, 2020. For this report we look at reported–not projected–data, which means that 2019 numbers will increase over time, relative to previous years.
Privacy and Security include the following categories:
Cloud Security, Corrections Facilities, Cyber Security, DRM, E-Signature, Fraud Detection, Homeland Security, Identity Management, Intrusion Detection, Law Enforcement, Network Security, Penetration Testing, Physical Security, Privacy, Security
Please note that all funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date of funding rounds, acquisitions, IPOs and other financial events as reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.
Glossary of Funding Terms
- Seed/Angel include financings that are classified as a seed or angel, accelerator fundings and equity crowdfunding below $5 million.
- Early-stage venture includes financings that are classified as a Series A or B, venture rounds without a designated series that are below $15 million and equity crowdfunding above $5 million unless otherwise noted.
- Late-stage venture includes financings classified as a Series C+ and venture rounds greater than $15 million.
- Note: Fundings denoted by Crunchbase private equity are not included in this report.