According to Oldypak LP report, Cybersecurity M&A deals reach $77.5bn in 2021.
In 2021, the cyber security industry recorded more investment deals (including M&A processes) than ever before. The M&A market was valued at $77.5bn, with investment funding at $29.5bn. What does one of the most attractive markets for investment look like today and what should we expect in the future?
The mathematics of good deals
According to Oldypak LP report, last year there were 1,043 financing agreements signed and 286 M&A transactions. And all of them were in the information security sector. Of these, 14 M&A deals were in excess of $1bn and 83 were in excess of $100m. 130 firms made private equity investments in cybersecurity and that is not the limit.
Most of the money was invested in cloud security, identity and access management, and endpoint protection. And that’s no coincidence. As ExpressVPN states in its guide to what a VPN is, there are a huge number of forms of hacking today, and it’s the duty of every conscientious entrepreneur to protect against them. A virtual private network can help protect against some cybercrimes, such as packet sniffing, spoofed Wi-Fi networks, and mediator attacks. In short, a VPN, by masking the IP, protects the user from any hacker attacks involving the exploitation of someone else’s IP address.
…In October 2021, Crunchbase estimated that in one year, investment in cybersecurity alone exceeded $14 billion. This figure left behind last year’s record of $7.8 billion of investment in information security companies. CrowdStrike Holdings was the leader in this area, in which world experts recommend investing. Its market capitalization ($65 billion) made this brand the leader in endpoint security investments. The said firm is followed by Fortinet ($55bn), Datadog ($50bn), Palo Alto Networks ($50bn), Zscaler ($42bn), Okta ($40bn), Splunk ($27bn), Akamai ($18bn) and SentinelOne ($17bn) in the top investment targets.
Why invest in technical solutions?
The infusion is expected to continue this year. And to the areas already listed will be added investments in complex defences against network threats. Investors’ interest in cybersecurity is dictated by several factors.
Cyber attacks are becoming more sophisticated. Today, it is possible to buy hacking software on the dark web for a few dollars and hack into a network. That’s why companies that don’t want to face data breaches are developing security strategies and implementing tools to counter phishing and ransomware.
A miser pays twice over. The proverb best describes the state of cybersecurity. In practice, firms that have allocated a budget to maintain an IT security department have been shown to be a winner in the long run. The consequences of cyber-attacks are not only devastating for the wallet of business owners but also for the reputation of their brands.
The value of cyber products is not limited to protection against hacker attacks. The image of a company that cares about information security attracts customers. Consumers are more likely to buy a product or service if they know that the information they report to the firm is leak-proof. In fact, to create such an image, it is necessary to adhere to the values of the digital age – honesty, accessibility and confidentiality.
Finally, it is necessary to comply with globally accepted cybersecurity standards, such as GDPR (General Data Protection Regulation). There are also local regulations that need to be followed. In the US, for example, the Sarbanes-Oxley Act (SOX) protects investor interests and addresses what to do if corporate information is stolen.