TLDR:
– Cyber security venture funding fell 20% year-on-year to $2.3 billion in Q1 2024
– Seed rounds accounted for two in five funding transactions
Article Summary:
Funding deals in the cyber security market dropped by 20% year-on-year to $2.3 billion in the first quarter of 2024, with 77 funding rounds closed. Seed rounds made up a significant portion of funding transactions, consistent with the previous year. M&A activity also declined from 31 deals in Q1 2023 to 24 deals in the recent quarter.
The investment levels in cyber security vendors are nearing a three-year low, following a decline from $8 billion in Q4 2021. Major players like Microsoft, Palo Alto Networks, and CrowdStrike are advocating for organisations to consolidate cybersecurity spending.
Palo Alto Networks introduced a new strategy called “platformisation” along with free incentives to attract customers away from legacy contracts. CrowdStrike, on the other hand, criticized this approach and refused to adopt similar tactics of deferred billing or deep discounts.
Despite the year-on-year decrease in funding, cyber security funding surged in March to $1.4 billion raised across 42 rounds, marking the first time funding exceeded $1 billion in a single month since February 2023.
