October 11, 2023 at 02:52PM
The third quarter of 2023 saw significant M&A activity in the cybersecurity industry, with Cisco’s $28 billion acquisition of Splunk leading the way. Other major players, including CrowdStrike and Check Point, also made strategic purchases to expand their offerings. Venture funding in the sector picked up after a slow start to the year, and IPO activity showed signs of revival. The managed security services market and cloud security and compliance sectors are expected to experience further consolidation. VC investment in the cybersecurity sector is expected to surpass $10 billion in 2023.
Key takeaways from the meeting notes include:
1. Cisco’s $28 billion acquisition of Splunk in September was the highlight of the quarter, signaling the consolidation of the security industry.
2. Several other vendors also made strategic purchases to position themselves in emerging enterprise requirements, particularly in cloud, application, and identity security.
3. Venture funding picked up steam after a slowdown earlier in the year, and IPO activity showed signs of revival for the first time since late 2021, highlighting the resilience of the cybersecurity sector.
4. The most active security segments were services, consulting, application governance, risk and compliance (GRC), security operations, and identity and access management.
5. Good valuations drove acquisition interest, with venture capital firms seeking quicker exits and many cybersecurity companies available at reasonable prices.
6. Other notable acquisitions in the industry included CrowdStrike’s purchase of Bionic, Check Point’s deal for Perimeter 81, Thales’ acquisition of Imperva, and Tenable’s purchase of Ermetic.
7. The managed security services market generated considerable interest from acquirers due to growing demand for security services.
8. Cloud security and compliance were identified as sectors with potential for consolidation.
9. VC activity in the third quarter suggested a rebound, with venture funding in cybersecurity expected to reach $10 billion in 2023.
10. Investment activity focused on the GRC segment, while API security and email security attracted less investment.
11. Major investments in the quarter included Cato Networks, OneTrust, SpyCloud, Resilience, and Nord Security.
12. IPO rumors started to heat up, with security startups like Cato Networks and Rubrik considering going public in 2024 as the market looks to rebound.