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Security market updateOctober 2017
Latest trends and drivers
2Source: Gartner, ITRC
• Global cybersecurity spend continues to grow, forecasted to reach a total of $86B in 2017 (7% YoY growth)
• An increasing number of CISOs are being mandated to report directly to CEOs and boards
• Artificial intelligence and machine learning are enhancing SOC productivity, while also detecting breaches at an unprecedented rate
• Demand for SOC expertise continues to outweigh supply
• The number of security breaches has, again, hit record highs, with 791 data breaches logged in the US alone through 1H ’17 – a 29% increase over 2016 figures during the same time period
• Politicians are calling for legal action against executives who allow their companies to be breached
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Early stage security forecasted to hit record highs
3Source: Pitchbook
Note: 2017 data runs through Q3’17.
Riding the tailwinds of the recent Equifax breach, deal count and valuations are expected to reach all-time highs in 2017.
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Public security multiples have remained strong…
4Source: Pitchbook
Note: Public comps include CHKP, SYMC, PFPT, PANW and CYBR.
After reaching a peak in Q1 ‘15, security multiples have settled around 8-9x LTM rev but may be in the early phases of another upward trend.
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Median: 4.9x
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…while private company valuations have also trended upwards though volatile
5Source: Pitchbook
Note: Public comps include CHKP, SYMC, PFPT, PANW and CYBR. Private valuations are comprised of all Series A, Series B and Series C rounds.
Private security valuations have followed trends in public multiples, albeit with a 6-month lag and in slightly erratic fashion.
Target Buyer Deal size Target Buyer Deal size
$2.3B $300m
$1.9B $293m
$1.6B $275m
$1.3B $145m
$600m $125m
$544m $100m
$440m $100m
M&A prices have trended downwards in 2017 as acquirers have shown earlier appetites
6Source: Pitchbook, press
Note: 2017 data runs through Q3’17. Includes selected acquisitions >$100m in deal size.
2017 YTD notable transactions 2016 notable transactions
Target Buyer Deal size Target Buyer Deal size
$1.6B $240m
Website Security$950m $230m
$614m $225m
$400m $185m
$350m $130m
$250m $120m
$250m $100m
HPECA
IBMRapid7
SynopsysQualys
WhiteHat Security
Other
Microsoft
CA
Oracle
IBM
Okta
Ping IdentityCentrify
Other
Symantec
Check Point
Palo Alto Networks
McAfee
Trend Micro
Cisco
Fortinet
Kaspersky
Sophos
Other
Symantec
Forcepoint
Cisco
Zscaler
McAfee
Trend Micro
Other
Symantec
McAfee
Digital GuardianForcepoint
Fidelis
Other
Symantec
Kaspersky
McAfee
Trend Micro
AVG
Other
IBM
Splunk
HPE
Dell EMC (RSA)
Micro Focus
Trustwave
McAfee
LogRhythm
Other
Proofpoint
Cisco
Symantec
Microsoft
McAfee
Trend MicroBarracudaMimecast
SophosForcepoint
Other
Symantec and McAfee continue to diversify their product offerings
7Source: Company filings, EIKON, Gartner, Thomvest estimates
SEGs
SWGs SIEM
Consumer
EPPs / ENFs
IAM
Testing
DLP
Note: $6.2B of market share has been left out as ‘Other.’
$1.5B
$2.0B $2.0B
$4.6B
$3.5B
$2.6B
$550m
$800m
$24B US security market in 2016.
Kareem [email protected]
About Thomvest Ventures
8
Thomvest is an early- to late-stage venture capital firm with $300m under management. We primarily focus on opportunities in the US with startups in the fields of cybersecurity, advertising & marketing technology, and financial technology. The capital we invest is our own, enabling us to be more creative, flexible, and patient with our entrepreneurial partners. More than two-thirds of the companies we have funded in the last decade have either gone public, been acquired, or continue to grow as independent businesses.
For questions or comments, please contact:
Umesh [email protected]
