Cyber security start-ups investment falls from $3.1b to $31m in 5 years

Brooklyn, NY

According to data from the Atlas VPN team, there have been 78 new cyber security companies founded in 2020, the majority 35% originating from the US.  Cumulatively these companies have managed to raise over $31.6 million in funding year-to-date, with one single company, called Beyond, alone raising $21 million.

According to Atlas VPN, only 15% of cyber security start-ups launched in 2020 secured funding. However, three companies alone collected nearly 96% ($30.3 million) of the total amount of investments.

The start-up that scored the most significant investment is Beyond. It secured a total of $21 million in February of 2020, which accounts for more than 66% of total investments into newly launched cyber security start-ups this year.

A cyber security company with the second biggest investment is Sevco Security, which raised over $6.7 million in May of 2020. Also, in the list of top three cyber security start-ups in terms of funding is Soc.OS. It received more than $2.5 million in investments in July this year.

Most of this year's cyber security companies are from North America or particularly the US. They make up nearly 35% (27) of all the cyber security start-ups launched in 2020.  The number of new cyber security start-ups is shrinking each year, whilst the amount of cyber incidents is increasing and cyberattacks are becoming more sophisticated.

Atalast VPN found historical data showing that in 2015 there were 490 cyber security companies launched. Together the start-ups that year raised over $3.1 billion in investments.

The year 2016 saw a slightly smaller number of new cyber security companies. The launch of new start-ups in the cyber security field decreased by 0.8%, with 486 start-ups launched that year. The total amount of funding allocated to those start-ups, however, dropped in half, from $3.1 billion to $1.6 billion.

In 2017 the number of new cyber security start-ups plummeted again by 0.8%. There were 482 cybersecurity companies founded that year, which raised more than $1.3 billion in total — 17% less than in 2016.

The number of new cyber security start-ups dropped by more than a fifth in 2018 compared to the year before. A total of 382 cybersecurity companies were launched that year, which collected over $847 million in investments. The amount of funds invested in the cyber security start-ups also dropped by 35% compared to 2017.

Last year saw a 46% decrease in the launch of new cyber security start-ups. There were 207 of these types of companies founded and together they raised close to $229.5 million in investments — 73% less than the year before.

Finally, this year's cyber security market has welcomed 78 newcomers — the number has shrunk by 62% compared to last year. However, 2020 is not over yet; hence we can expect the numbers of cyber security companies to still increase slightly.


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