The New Age Of The Security Startup

Editor’s note: This is a repost of a TechCrunch article written by Jon Shieber.

Last month Apple disclosed and fixed a massive bug in its operating system that left users’ information exposed to theft; faith in the cryptocurrency Bitcoin is eroding; and revenues at the retailing giant Target fell 46% on a quarterly basis over the Christmas season last year, all because of security breaches.

There is no doubt that the profusion of technology designed to make personal and professional lives easier has left people around the world personally and professionally more exposed to potential threats like identity theft, unwanted surveillance, and corporate espionage.

To combat these growing threats the entrepreneurs and investors that helped to seed this technology revolution are going back to the well to finance a new generation of security startup.

Since 2009 investors have spent at least $2.9 billion on security technologies, according to data from CrunchBase. And so far this year investors have spent at least $150 million in 26 new investments in security technology companies.

Investors are also valuing these companies more highly now. In the first quarter of 2013 investors made 44 investments with roughly the same amount of capital, the CrunchBase data shows.

The need for new security technology is also driving up company valuations at the earliest stages of their development, the CrunchBase data shows. In the first quarter of 2013 16 seed stage companies raised $4.9 million. For 2014, less than half the number of companies raised roughly the same amount.

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