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Why aren’t venture capitalists flocking to fund cybersecurity startups?

On the back of pretty strong earnings reports and valuations, public cybersecurity companies are outperforming the broader technology segment. Yet, funding for cybersecurity startups has flatlined.

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It’s an interesting issue that is worth taking a moment to consider. This morning, let’s look at how cybersecurity companies have performed, as well as a number of datasets regarding Q1 2023 venture capital investment to understand why investments have been tepid in this sector despite stellar results from the companies.

Sounds good? To work!

How to make a lot of money in the technology game

If you want to earn truckloads of cash selling software today, I wouldn’t recommend making an API to connect a blockchain to the e-sports world. Both of those sectors are struggling after a period of overinvestment and hype, though I hope both rise again: The former because it would be entertaining in a business context, and the latter because I am a huge nerd who is patiently waiting for a Starcraft revival.

No, if you wanted to make a lot of money in the technology game today, you would build and sell cybersecurity products.

The evidence is clear. Cybersecurity is chugging along quite smoothly, even as the largest tech companies muddle along and Zoom figures out how to grow again after one of the most impressive runs in corporate history.

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