Q1 2024 Cybersecurity Industry Update
Back on track
It’s not surprising that investment and growth are up in the first quarter of 2024. Investment and economic outlook appear to be following the stock market which, for cybersecurity stocks, more than doubled for leaders like PANW and CRWD.
138 cybersecurity vendors took in $3.8 billion in new investments through April 1. If that level of investment continues we can expect $15.4 billion for all of 2024 which would be up 50% from last year. I predict that as investors recover from the shock to their system delivered by the March, ‘23 failure of Silicon Valley Bank, they will invest at a great rate than that, possibly hitting $17 billion for the year.
Eleven vendors raised $100 million or more.
Quantinuum is probably the only name that is not familiar to most readers. The three year old Broomfield, Colorado, company employs 407 people. It is not 100% security because its main goal is to develop quantum computing which has many use cases that will dwarf quantum cryptography. But, its Quantum Origin product is already being used to generate quantum keys.
The year got off to a fast start with the announcement of $100 million investments in both Nozomi and Claroty—industrial control system security companies. Claroty has taken a total of $632 million since its founding in 2015, while Nozomi has seen $252.5 million since its inception two years earlier.
Claroty has seen consistent headcount growth over the years.
While Nozomi had significant layoffs last year, dropping 30%
Don’t be confused that a company named Clarity also took in funding in Q1. This Israeli startup raised a $16 million seed round from Bessemer and Walden Catalyst Partners to counter deep fakes.
Also confusing: Dapple Security, a biometric authentication vendor, took in $2.3 million in seed funding, while Dopple Security, a brand protection company that finds AI fakes, took in $14 million from Andreessen Horowitz.
Out of the 3,785 cybersecurity product vendors tracked in the IT-Harvest Dashboard, 1,205 (32%) have grown their head count so far this year. 973 have lost head count. The remaining 1,607 remained steady in head count in the first quarter.