Investment in the booming cybersecurity industry could be one of ‘the first signs of recovery’ – here’s where five insiders say to place your bets in the fast-growing industry

Chenxi Wang of Rain Capital

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Cybersecurity is heading into the home stretch of 2020 as a bright spot in investing – especially for new startups that address certain areas such as remote work needs – according to a new report and commentary from top investors.

This makes investment in cybersecurity an early and promising area of economic recovery from the COVID-19 downturn, they say. New research from cybersecurity startup accelerator DataTribe shows seed investment in security startups is booming, both in comparison to past years and to other parts of tech.

“These numbers are the craziest I’ve ever seen in all my years of doing this,” says Mike Janke, cofounder of DataTribe. In Q3, cybersecurity represented a record-high 19% of all US early venture activity, the report found. Deal size for early cybersecurity startups was up 33% in Q3 compared to Q3 2019, DataTribe found. 

“Q3 marks the first signs of recovery for those industries bolstered by the pandemic, particularly cybersecurity,” DataTribe says in the new report. Janke and other top investment experts point to certain key areas in Q4 and 2021, including the red-hot area of developer security, which involves protecting computer code from security vulnerabilities as software and applications are being created. 

Forrester cybersecurity analyst Jeff Pollard agrees that security investing could lead the way out of the downturn for tech. “Cybersecurity spending – due to externalities such as attackers, regulatory bodies, governments, and third party requirements – will likely make the sector a source of faster recovery in tech spending areas,” he says. 

Here is the guidance from Janke and four other top experts on where they’re placing their bets: 

Mike Janke, cofounder of DataTribe startup accelerator

Janke says there is a boom in developer security operations – the sector of cybersecurity that helps developers ensure the computer code they use to build software is free of security issues. “DevSecOps is a hot area,” he says. 

He points to a related area, security for developers of applications, as a hot area for startups including DataTribe investment Code Dx. And he says protection of executives working at home is a hot trend, led by DataTribe investment BlackCloak.

“You now have CEOs, CFOs, and board members all working from home, on home networks,” he says, where they are vulnerable to hackers, including well-funded nation-state hackers from adversaries such as Russia, China, North Korea, and Iran. 

Ted Schlein, general partner at high-profile venture capital firm Kleiner Perkins

Another fan of developer security is Ted Schlein, the longtime cybersecurity investor and general partner at revered VC Kleiner Perkins. Schlein told Business Insider he has been waiting to nip security issues in the bud for a long time. “I have spent 35 years trying to get at the root cause of cybersecurity issues.”

In cybersecurity this is sometimes referred to as “shifting left,” beginning security earlier into the product development. Schlein believes the sector is “a big deal.” Schlein says Apiiro, which just grabbed a $35 million Series A round that he led, is a key example of companies preventing security issues that are …read more

Source:: Business Insider


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