The increasing threat of cyber attacks has precipitated an increased need for cyber security solutions, and venture capital firms have been taking note.
The increasing threat of cyber attacks has precipitated an increased need for cyber security solutions, and venture capital firms have been taking note. Here, we profile the top venture capitalists in this growing market, identifying where exactly they direct their investments.
CB Insights’ “Cybersecurity Industry Report” identifies the major venture capital investors driving early-, mid-, and late-stage investment in this industry. The five major venture capital investors in this field are Intel Capital, Accel Partners, Kleiner Perkins Caufield & Byers, Sequoia Capital, and Andreesen Horowitz.
As Intel’s global investment organization, Intel Capital has invested over $11.4 billion in over 1,400 companies since its inception in 1991. Last year alone, it invested $359 million in 125 deals. Within the cybersecurity market, Intel Capital is an active mid- to late-stage investor.
Investing in companies like PacketMotion, Onset Technology, PerspecSys, and mFormation, and investing late in TriCipher, PGP Corporation, and Solera Networks, Intel Capital is the leading venture capital firm in this sector. It ranks second on CB Insights’ list of most active mid-stage investors, and tops the list of most active late-stage investors.
Accel Partners is a global venture and growth equity firm headquartered in Palo Alto that funds promising technology companies from their inception. According to CB Insights, Accel partners is the third most active early-stage investor, and fourth most active late-stage investor in cyber security.
Overall, it is the second most active investor in cyber security startups across all stages of investment. Last August, it led a $25 million round of Series C funding for the cyber attack detection company Vectra Networks. In April of this year, it contributed to $100 million Series C financing for the two-year old startup Illumio, which helps companies effectively detect malicious software that that have breached firewalls.
Kleiner Perkins Caufield and Byers
Kleiner Perkins Caufield and Byers (KPCB) is a venture capital firm which supports companies in all stages of development, from seed and incubation to growth. KPCB is ranked by CB Insights as the most active mid-stage venture capitalist in cyber technology, investing in ten cybersecurity companies. These include Apperian, Endgame, and Reputation.
Sequoia Capital is tied with Intel Capital as the second most active mid-stage venture capital investor in the cyber security industry. The venture capital firm also also the runner up for most active late-stage investors in cyber security.
For example, in 2012 Sequoia led $34.5 million Series D financing for the cybersecurity company Bit9 (Kleiner Perkins Caufield and Byers was also involved in this funding). Last year, Sequoia led $25 million in Series D funding for Druva Inc., which works to protect data residing outside of corporate firewalls.
A Silicon Valley-based venture capital firm launched in 2009, Andreessen Horowitz invests in companies from seed to growth. In the cyber security industry, CB Insights ranks Andreessen Horowitz is the most active venture capitalist firm in terms of early-stage investment. Some of the companies that it has invested in are Pindrop Security, Signifyd, and Bromium.
Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.