Cybersecurity Deals Boom as Investment Dips, Pinpoint Reports

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The cybersecurity sector recorded 346 funding rounds and 91 mergers and acquisition (M&A) transactions in 2023, according to cyber recruitment firm Pinpoint Search Group.

This equals 437 cyber deals in total and a 40% increase from 2022, which saw 303 deals signed in the sector.

However, the overall cyber investment raised in 2023 only amounted to $8.7bn, which represents a 40% decrease in fundraising from the previous year's $14.5bn.

Investors Shifted to Early-Stage Funding

According to Pinpoint’s research team, this decline in total funding raised can be attributed to a shift in investor focus in 2023.

“Investors adjusted their approaches, directing a greater portion of their funds into early-stage initiatives within the cybersecurity sector,” reads the report.

This trend is confirmed by the breakdown of rounds per type, with seed funding alone making up 42% of all funding deals.

Series A and series B rounds came second and third, representing 24% and 13% of all deals, respectively.

Source: Pinpoint Search Group
Source: Pinpoint Search Group

Additionally, the 91 M&A deals recorded in 2023 represent a 20% decrease from 114 transactions in 2022.

Top Funded Domains: Identity, Detection & Response and GRC

The top funded subdomains in 2023 were identity, detection & response and governance, risk, and compliance (GRC), although all three received less funding than in 2022 and 2021.

Source: Pinpoint Search Group
Source: Pinpoint Search Group

The start of 2023 recorded some of the highest funding rounds with Netskope raising $401m in January, Sandbox AQ securing a $500m growth round and Wiz achieving a $300m series B round in February.

Source: Pinpoint Search Group
Source: Pinpoint Search Group

Funding deals recorded by Pinpoint Search Group do not include rounds under $1m, grants and debt funding.

Undisclosed funding rounds are omitted starting from the third quarter of 2023.

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