Cybersecurity Startup Funding Hits 5-Year Low, Drops 50% From 2022
Just two years ago venture funding to cybersecurity was on fire, with more than $23 billion flooding the sector.
In 2023, cyber startups saw only about a third of that, as venture funding dipped to its lowest total since 2018. Security companies raised $8.2 billion in 692 venture capital deals last year — per Crunchbase numbers — compared to $16.3 billion in 941 deals in 2022.
The drop was exacerbated by Q4 numbers, as startups locked up $1.6 billion — marking the lowest quarter since Q3 2018 when cyber firms raised just $1.3 billion. Only three cyber startups raised rounds above $100 million. “What we saw in terms of cybersecurity funding in 2023 were the ramifications of the exceptional surge of 2021, with bloated valuations and off-the-charts funding rounds, as well as the wariness of investors in light of market conditions,” said Ofer Schreiber, senior partner and head of the Israel office for cyber venture firm YL Ventures.
