The cybersecurity startup market has cooled in recent months amid a broader tech slowdown:
- PitchBook stated that infosec market funding was $3.2b
in Q2 2022, down 45% from Q1. Exits fell to 13 in Q2 2022 -- their lowest
level since 2018.
- Separately, DataTribe
reported that median valuations for cyber startups fell to $12m in Q2,
down 33% from $18m in Q1.
From a broader perspective:
- The cyber market's long-term
prospects remain strong -- the global cybersecurity market is projected to grow at a 13.4% CAGR through 2029.
- The industry is now inundated with vendors -- most
venture-backed, many cash-flow negative. Scores of these new vendors will
have layoffs/merge/fail. Some tips to manage this turmoil for enterprise customers:
- Create a 2x2 with “Criticality to our Ops” vs.
“Financial Viability” as the axes -- plot your vendors.
- Focus on high-risk
vendors & ask leadership (not the sales reps): “What’s your monthly
cash burn?” and “How much money is in your account?”
- Start scenario-planning
on what you would do if “Vendor X” cuts staff, gets bought or shutters.
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