Venture Capitalists Take Note of Cybersecurity Spending

Venture capitalists have been taking note of the rapid influx in cybersecurity spending.
According to an article on the MIT Technology Review:

With cyberattacks getting worse, the urgent need today is for faster responses, smarter technologies, and wider encryption. VCs are hoping to get a piece of companies’ increased spending on cybersecurity. In 2014 Gregg Steinhafel, the CEO of Target, became the first head of a major company to lose his job over a data breach. Now, worried company leaders are giving their security units a “blank check,” says Scott Weiss, a general partner who specializes in security at the venture capital firm Andreessen Horowitz: “The CEO has said, ‘Look, whatever you need, you’ve got.’”
Today’s advanced threats are much too sophisticated for traditional tools like antivirus software and firewalls. Not wanting to buy obsolete products, security executives are increasingly venturing into agreements with cybersecurity startups. To Weiss and other venture investors, that kind of customer demand is an investment opportunity. According to CB Insights, the global VC community poured a record $2.5 billion into cybersecurity companies in 2014, a strong year for IT startups in general and software in particular. Security companies raised another $3.3 billion in 2015.
The problems these startups are trying to solve are complex. The bad guys do have better weapons, but business systems are also becoming vulnerable in new ways. Businesses are relying more on cloud services and connecting more “things” to the Internet, and their employees are using more connected devices.

Click here to read the full article on the MIT Technology Review.