Venture Funding Report

FROM THE EDITORS AT CYBERSECURITY VENTURES

Q4 2016

The Venture Funding Report provides a diary of noteworthy VC investments over the past quarter. From startups to some of the market’s largest players, we track the deals that keep you on the cutting edge of cyber.

VC DESK

Deal flow dropped off in last quarter of 2016

moragMorag McGreevey

Menlo Park, Calif. – Jan 13, 2017

After strong growth in Q3 16, cybersecurity funding dropped by more than half in the final quarter of 2016. According to PwC, the market saw $370 million in funding — a strong figure, but nowhere near what the industry saw earlier this year.

“VCs focusing on cyber took a deep breath in Q4 16”, says Steve Morgan, founder and Editor-In-Chief at Cybersecurity Ventures. “The market is digesting historic levels of cyber funding over the past two years.”

Cybercrime damages are predicted to reach $6 trillion annually by 2021, and security spending is expected to exceed $1 trillion cumulatively over the next 5 years” adds Morgan. “This leads us to believe that VCs will take another big bite into cyber firms during 2017.”

Despite the significant drop in cybersecurity funding at the end of last year, there was some exciting movement in the marketplace and the deal flow is already trending up in the first quarter of 2017.

DEAL FLOW

December

Dec. 29. Swimlane LLC, a Colorado-based startup, raised $3 million in private offering funding round, backed by shares of stock in the privately held company.

Dec. 23. Fishtech Labs has invested $4 million in Haystax, and will be adding Haystax’s Constellation primary security analytics platform, to its “best-in-class” portfolio.

Dec. 15. Delve Labs, a Montreal-based autonomous security solutions company, raised $1.5 million in seed-stage financing backed by Real Ventures, Desjardins Innovatech and Fonds Québecor Innovation.

Dec. 14. EverCompliant, an Israeli cyber intelligence company, closed a $9.5 million Series A financing round led by Arbor Ventures with additional support from Carmel Ventures, StarFarm Ventures and Nyca Partners.

Dec. 12. Wallarm, a web app security startup in Menlo Park, Calif. led by a team of ex-white hat hackers raises $2.3 million after going through Y Combinator.

Dec. 11. Optiv Security, a Denver, Colorado-based provider of cybersecurity solutions, received investment from KKR from its eleventh Americas Private Equity investment fund. Sellers included a group of private investors, including a private equity fund managed by Blackstone.

Dec. 7. Kenna Security closed a $15 million Series B funding round, led by PeakSpan Capital with participation from OurCrowd, U.S. Venture Partners, Costanoa Venture Capital and Hyde Park Angels.

Dec. 7. Fhoosh, a Miami, Florida-based company, secured a $2 million investment from Volta Global.

Dec. 6. Secdo, an Israel-based startup, raised $10 million in a Series A funding round headed by RDC, a subsidiary of Elron Electronics Industries and Rafael, Check Point co-founder Marius Nacht, and the founders of Anobit.

Dec. 2. SEWORKS completed a $8.2 million in Series A funding, led by Smilegate Investment and Softbank Ventures, with Qualcomm Ventures, Samsung Ventures and Wonik Investment Partners also participating.

Dec. 1. Delta Risk LLC, a San Antonio-based cyber defense firm founded by former military veterans, raised $3 million in debt among six investors, according to records on file with the U.S. Securities and Exchange Commission.

November

Nov. 30. AttackIQ, a San Francisco-based startup, landed a $8.8 million funding round with investment from Index Ventures, Qualcomm Ventures and Telstra Ventures.

Nov. 30. Sixscape, a developer of secure communication software, raised $2 million in funding from Tembusu ICT Fund I, a Singapore-based software-focused venture capital fund.

Nov. 29. Coretelligent LLC, a provider of secure private cloud and IT managed services, received an undisclosed investment from Veronis Suhler Stevenson.

Nov. 28. Proficio, a provider of managed detection and response services, raised $12 million in a funding round led by Kayne Anderson Capital Advisors, L.P.

Nov. 23. TAC Security, an Indian start-up helmed by 23-year old Trishneet Arora, closed its pre-series A funding from businessman Vijay Kedia and outlined its plan to close a Series A funding round of $10 million imminently.

Nov. 23. InfiSecure, a startup founded in March 2016, secured $600K in seed funding from IDG Ventures and Axilor Ventures.

Nov. 17. Prevalent Inc., a provider of third-party risk management and cyber threat intelligence, raised $60 million in Series C funding led by Insight Venture Partners.

Nov. 16. Invincea, whose software prevents against malware and analyzes systems for potential vulnerabilities, raised $10 million in a funding round led by ORIX Growth Capital.

Nov. 15. Siemplify, a cyber-threat management and analysis company based in New York and Israel, announced a $1o million round of Series A financing led by 83North Venture Capital and G20 Ventures.

Nov. 10. RiskIQ, a San Francisco-based cybersecurity company specializing in digital risk management, closed a Series C funding round of $30.5 million led by Georgian Partners.

Nov. 4. Bayshore Networks, a company that specializes in the Industrial Internet of Things, received Series A funding from Yokogawa Electric Corporation, a $3.7 billion industrial leader in its field.

Nov. 2. ValiMail, which helps enterprises protect their e-mail inboxes, raised $12 million in Series A financing, in a round led by Shasta Ventures with follow-on investments from Flybridge Capital and Bloomberg Beta.

Nov. 1. CounterTack announced a $10 million funding round from a portfolio of strategic investors, including TenEleven Ventures, Fairhaven Capital and Goldman Sachs.

October

Oct. 28. Dragos, Inc., a San Antonio, Texas startup providing tools to cyber defend industrial control systems, raised $1.2 million from DataTribe — an angel incubator and venture capital firm based in the Washington, D.C. region.

Oct. 24. Nozomi Networks completed a $7.5 million Series A round of financing, which was co-led by GGV Capital and Lux Capital, with additional participation from previous investor Planven Investments SA.

Oct. 14. VMRay secured $3.9 million in Series A investment with eCAPITAL entrepreneurial Partners AG and High-Tech Gründerfonds (HTGF) to accelerate adoption of the company’s agentless automated threat detection services.

Oct. 14. HYPR, a New York-based startup, raised $3 million in seed funding, with investment led by Kirill Sheynkman of RTP Ventures, Ed Sim of Boldstart Ventures and Ed Chyau of Mesh Ventures.

Oct. 12. Virgil Security completed a $4 million Series A funding round led by KEC Ventures, with additional investment from Bloomberg Beta, Blu Venture Investors, Change Ventures, NextGen Venture Partners, Sparkland Capital, and Working Lab Capital, among others.

Oct. 11. GigaTrust, a provider of e-mail and document protection solutions, raised $20 million in funding from Balance Point Capital.

Oct. 8. E8 Security, an innovator in behavioural intelligence, announced the completion of a $12 million Series B funding round led by Strategic Cyber Ventures.

Oct. 6. Cybric, a next-generation of cybersecurity automation and vulnerability remediation company, closed $6.3 million in seed funding with Capstone Ventures and Petrillo Capital.

Oct. 5. Factum, an Austin, Texas-based company that works with blockchain technology, raised $4.2 million in a Series A funding round led by Draper Associates.

Stay tuned for the Q1 2017 edition of the Venture Funding Report

 – Morag McGreevey is a freelance writer covering cybersecurity, national security, VC deals, and investing.

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