PitchBook News - New cyber threats driving consolidation

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The Research Pitch

May 8, 2021

Cyberattacks spurring acquisitions of infosec startups

From 2015 to 2016, the urgency of emerging cloud security vulnerabilities kicked off a wave of consolidation that drove incumbents to invest $7.6 billion via acquisitions.

Yet urgent threats continue to emerge across the landscape, particularly in the areas of software supply chain and cloud access management, driving a new era of infosec consolidation.

In prior research we identified industry trends with potential for similar waves of consolidation, including secure networking, threat hunting automation and secure DevOps.

In Q1, the latter two of these trends have begun to mature, with threat hunting automation taking shape via security operations acquisitions and developer-focused security achieving a record exit size.

Our latest infosec update finds that these consolidation trends are creating opportunities in extended detection & response (XDR), secure access service edge (SASE), and DevOps security—categories receiving the highest rates of M&A, VC growth and user adoption during the quarter. We also detail the role of unicorns Darktrace, SentinelOne and Snyk in leading the industry response to these opportunities.

This update also highlights the trends behind the record VC deal flow and major acquisitions in Q1 as VC mega-deals for cloud security startups and acquisitions of developer-focused security startups reshape the landscapes of their respective segments.

Relative to our previous quarterly releases, this update initiates a condensed report format that provides an overview of VC activity, updated market size estimates and market maps, as well as analysis of key emerging opportunities.

Comprehensive industry reports from our Emerging Tech Research team will be published annually and provide a full overview of the vertical.

Read our Q1 2021 Infosec VC Update

Feel free to email me or our institutional research team with any feedback or questions.

Best,

Brendan Burke
Senior Analyst, Emerging Technology

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Market Updates

We've combined our North American and European M&A reports into a comprehensive global offering.

This quarterly report features North American and European spotlights and highlights the most important trends shaping global M&A in each sector. Notably, European M&A had its strongest quarter in years, while North American activity is normalizing.

From abundant liquidity and C-suite confidence to the tech M&A frenzy, we outline all the key drivers:

read the report

PitchBook Benchmarks

The latest PitchBook Benchmarks, as of Q3 2020 with preliminary Q4 2020 data, have been released!

We've continued to enhance our processes and offerings to improve timeliness (this report now goes out a month earlier than it did each quarter in 2020 and also features preliminary data to lessen the reporting lag), the level of detail (new this quarter are slices within funds-of-funds and secondaries, so users can see VC funds-of-funds and real estate secondaries funds, for example), and transparency (these reports don't sit behind a client-only paywall):

view our benchmarks

Webinars & Events

US VC fundraising is on pace to reach new heights.

Late-stage deal activity is also breaking records, and exits have remained robust.

We hosted our quarterly Venture Monitor webinar this week to discuss all of these trends and more with panelists from Silicon Valley Bank, Secfi and the NVCA: watch the on-demand replay

One more webinar for your radar:

May 19: Our EMEA analysts will discuss the latest trends in the European PE and VC markets and look at how their 2021 predictions are faring. Register here.

Deal Commentary

AI analyst Brendan Burke weighs in on a $56 million Series B funding round for autonomous welding company Path Robotics:

"This 4.5x deal size step-up further substantiates our view that intelligent robotics are growing in commercial adoption and strategic importance through the COVID-19 pandemic.

"Path Robotics builds AI-enabled welding robots that can operate in dynamic environments.

"We believe that robotics is primed for an increase in VC activity because of automation needs stemming from the pandemic, scientific improvements in AI & ML, underpenetration of robotics in non-automotive manufacturing globally, and a cyclical rebound from low manufacturing as a result of the US-China trade war.

"We forecast the intelligent robotics market to reach $13.4 billion in 2021, growing at a 10.9% CAGR out to 2024."

Brendan Burke

Senior Emerging Technology Analyst
AI & Machine Learning

In the News

Our insights and data featured in the press:

Funding is picking up for U.S.-based chipmakers. Analyst Brendan Burke offers some background and identifies the top VCs in the space. [Reuters]

Five things to know about the SPAC boom features the insights of analyst Cameron Stanfill. [Nikkei Asia]

How active has Tiger Global been? An article on the mega-investor's plans for a new mega-fund includes our data on its 2021 deal activity. [FT]

Inside rounds are a growing trend in the world of venture capital. We've got the data to complement this analysis. [The Information]

A deep dive into the state of European VC relies heavily on the research and insights of analyst Nalin Patel. [Startup Business (Italy)]

If you're a media member interested in interviewing our analysts, contact our PR team.

ICYMI

Highlights from our research content published over the past few months:

Market updates

Thematic research

Emerging Technology Research deep dives

Coming next week (subject to change)

Analysis of Public PE Firm Earnings: Q1
PE Firms Taking Stakes in Pro Sports Teams
ETR: Mobility Tech (sneak peek here)
ETR: Enterprise Health & Wellness Tech

Thanks for reading! Feel free to email us any time with feedback, questions or tips!

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PitchBook News - New cyber threats driving consolidation

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