[August 06, 2018]

Momentum Cyber's Mid-year Market Review has Cybersecurity Industry on Track for Best Year Ever with IPOs, VC & PE Financings and M&As at Record Levels

Momentum Cyber, the premier strategic advisory firm dedicated exclusively to the cybersecurity industry, today released its Cybersecurity Mid-year Review for 2018 demonstrating that the pace of IPOs, VC/PE financings, and strategic M&A activity are all on pace to surpass previous years.

The mid-year report examines 1H'18 cybersecurity transactions and identifies trends that are impacting the dynamic and rapidly evolving cybersecurity landscape. Tapping into the firm's industry-leading and proprietary M&A and financing transaction database, 1H'18 has already experienced a record volume of strategic activity.

Key Report Highlights

• A record 101 M&A transactions, totaling $4.2B in transaction volume, representing an 11% increase year-over-year
• A record 209 financing transactions, totaling $3.0B in transaction value, with a median amount raised of $8.0M
• IPO activity is on track to surpass 2017 with 3 completed IPOs in 1H'18 (Zscaler, Carbon Black, Avast) quickly followed by Tenable (July), and a strong pipeline including Tanium, Darktrace, Pindrop, Illumio and Cloudflare
• Valuations continue to trend higher for public cybersecurity companies, with median multiples increasing by 76% since the "Trough" back in June 2016
• An alarming $2.3B has been lost to cryptocurrency hacks and breaches so far this year
• Trends across cybersecurity include social media as an increasing attack vector, private equity's continued appetite for cybersecurity, U.S. airports' Wi-Fi network vulnerabilities, GDPR's influence on the data privacy industry, and the cybersecurity skills shortage
• Sectors in focus include: Security Orchestration & Automation (SOAR), Risk Assessment & Visibility, Threat Intelligence, Security Information & Event Management (SIEM), Data Encryption, Pen Testing & Breach Simulation, and Social Media & Digital Risk Management

"A combination of global conditions has created the perfect cyber storm bearing out opportunities for investment, as is evidenced in the level of financings and M&As we've witnessed in the first half of this year alone," said Momentum (News - Alert) Cyber Chairman Dave DeWalt. "Vulnerabilities exposed by the speed of innovation, the increasing significance of internet anonymity, and geo-political tensions are just a few heavy-hitting factors driving some of the biggest waves in cyber."

Momentum Cyber as a firm dedicated exclusively to cybersecurity is experiencing its own record growth as more companies and boards - both cyber and non-cyber - realize the importance of specialized industry advice combined with unique, senior-level access for CEOs, founders and boards.

Firm Growth Highlights

• Team Expansion. Ken Gonzalez joined the firm as a partner having completed 40 acquisitions, 23 in cybersecurity, while an executive at FireEye (News - Alert), McAfee, and Siebel Systems. Jeremy Isagon joined the firm as an associate, and formerly from Robert W. Baird & Co's Technology and Services group. Tim Van Tuyle joined as an associate, previously from technology-focused investment bank AGC Partners. Therese Coutermash, employee 33 at FireEye with over a decade of administrative and financial experience, joined the firm as director of administration.
• Deal Activity. Since last summer, Momentum Cyber has closed six transactions in cybersecurity including Icebrg's sale to Gigamon, ADT's acquisitions of Secure Designs and Datashield, Bradford Networks' sale to Fortinet, Weblife's sale to Proofpoint, and Cyphort's sale to Juniper. The firm is working with leading companies across the industry evidenced by a backlog and pipeline that are up 200% over last year.
• New Headquarters. Momentum Cyber established its U.S. headquarters at 101 Second Street, San Francisco providing ample space to the continuing growing the team.