eWEEK content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.
There were no shortage of security vulnerabilities disclosed and companies breached in 2017. For venture capitalists, all that security news provided further incentive to invest in cyber-security startups, as the opportunity and demand for new technologies continued to grow.
Over the course of the year, eWEEK has chronicled the flow of new money into cyber-security vendors in a series of end-of-the-month slideshows, listing the investments made. The companies that raised money in 2017 represent a diverse cross-section of technologies that serve to illustrate the different areas of demand for new types of cyber-security products and services.
A few obvious trends emerge from looking at all the cyber-security vendors that raised money in 2017. The Internet of Things (IoT) is one key area of investment where venture capitalists are placing their bets. Cloud security continues to be a hot area with multiple vendors raising new funds and the emerging world of container security was another area of active growth.
The money that poured into cyber-security startups in 2017 varied based on the maturity of the company and the perceived market opportunity. While early-stage startups raised typically raised $5 million or less, there multiple vendors in 2017 that raised $100 million or more.
The $100M Club
Prior to 2017, there were few cyber-security vendors that had ever raised $100 million or more in a funding round. In contrast, over the course of 2017 at least 6 vendors raised $100 million or more, across a number of diverse product categories.
The first big $100M round was announced on May 17 by security vendor CrowdStrike, which integrates multiple capabilities as part of its Falcon platform, including Endpoint Detection and Response (EDR). A week later on May 25, Tanium announced that it raised $100 million to help advance its endpoint security platform efforts.
June was another busy month for big funding announcements. On June 6, Cloud Access Security Broker (CASB) vendor Netskope announced that it raised $100 million. On June 7, Illumio announced that it raised $125 million in support of its Adaptive Segmentation Security platform.
BlueteamGlobal announced a $125 million funding round on Aug 3, to help provide threat intelligence and managed security services. Rounding out the big funding rounds for 2017 is a $150 million round raised on Oct. 25 by Skybox to help advance the company’s platform for security policy and configuration management.
Container Security
One of the newest areas of cyber-security funding that emerged in 2017 was for container security technologies. At least six different vendors raised new money this year in support of their container security technology efforts, raising approximately $80.2 million in total.
On Apr. 25, container security vendor Twistlock announced that it had raised $17 million, the following month on May 18, Aporeto announced that it raised $11.2 million. StackRox emerged from its stealth mode on July 18, along with $14 million in funding.
September was the busiest month of the year for container security funding with two firms making announcements. On Sept. 19 Aqua Security announced a $25 million round, while Capsule8 announced a $6 million round on the same day.
Rounding out the container security funding for the year was Neuvector which announced on Nov.7 that it raised $7 million in new funding.
IoT Security
In the wake of the large scale attacks at the end of 2016, including the Mirai botnet, there was an obvious need in 2017 for improved internet of things (IoT) security. Multiple vendors have emerged to meet the IoT challenge, raising new money in 2017.
Mocana announced on May 16 that it raised $11 million to support its embedded IoT security efforts. On June 8, Armis emerged from its stealth mode with $17 million in funding to help expose IoT device risks. On Aug. 8 MagicCube raised $8.5 million and Zingbox raised $22 million on Aug. 17.
Pwnie Express brought in $8 million of new funding on Nov. 29 to help its IoT detection efforts and Cog rounded out the year in IoT funding, raising $3.5 million on Dec. 12.
2018 Outlook
Other vendors of note that raised money in 2017 include endpoint security vendor SentinelOne which announced a $70 million round on Jan. 25. Also in January 2017, CASB vendor Bitglass raised $45 million.
While 2017 was a robust year for cyber-security startup funding, it’s likely this level of activity will continue on into 2018. Expect to see more $100 million or larger rounds of funding as more mature startups aim to grow faster and outpace global competition. Container security is still a nascent area and no doubt there is still more new money that will go into the sector as demand continues to grow. Looking at IoT security, the picture is also clear, as organizations of all sizes struggle to figure out the challenge of securing IoT devices at scale.
There continue to be challenges in the areas of data security, authentication and mobile security as well, which will also be areas ripe for investment and new technologies in 2018. Money is also likely to flow into vendors that make artificial intelligence and machine learning based security technologies easier to use and deploy.
Simply put, as attacks continue to make headlines, entrepreneurs will continue to try and develop new technologies to mitigate risks and investors will continue to see opportunities in cyber-security startups.
Sean Michael Kerner is a senior editor at eWEEK and InternetNews.com. Follow him on Twitter @TechJournalist.