Enterprise customers are waking up to the fact that these cybersecurity investments are not discretionary. They're realizing that the cost of getting it wrong is too high, and in response, cyber IT budgets are exploding, growing from $65 billion last year to an estimated $93 billion in 2016. Addressing these risks represents a high-value opportunity for entrepreneurs. Now is the time for forward-thinking entrepreneurs and investors to respond to both the threat and the associated opportunity, because they will only grow in the future.
During the past year, venture capital firms invested a record-high $1.4 billion in 239 cybersecurity companies—from mobile-app security platforms to online-authentication infrastructures, according to research firm CB Insights. Nearly 80 cybersecurity start-ups have exited, either through acquisition or IPO, with an average tenfold return on investment.
Notable deals include FireEye's IPO, which priced its initial public offering of 15.2 million shares at $20 per share in September 2013, raising about $304 million. Just five months later, FireEye has a market cap of almost $10 billion.
Other recent transactions over the last 12 months that have drawn the attention of serious investors are the $1 billion acquisition of endpoint security provider Mandiant; Cisco's $2.7 billion purchase of network security firm Sourcefire; and IBM's acquisition of cybercrime prevention firm Trusteer for $1 billion.