06/08/2021 | Press release | Distributed by Public on 06/08/2021 12:57
Venture capital (VC) funding and mergers and acquisitions (M&A) activity in the cybersecurity space fluctuated during 2016-2020, according to GlobalData, a leading and data analytics company.
VC deal volume announcement in the cybersecurity space shrank by 16.5% from 762 in 2019 to 636 deals in 2020 and the deal value declined by 25.6% from US$17.1bn in 2019 to US$10.8bn in 2020.
After registering decline in 2017, VC funding deal volume rebounded in 2018 and 2019, before shrinking again in 2020. While VC funding deal value in the cybersecurity space showed consistent growth during 2016-2019, the COVID-19 pandemic reversed the trend and deal value shrank by 36.8% in 2020. Despite showcasing a fluctuating trend, the VC deal volume and value increased at a CAGR of 7.9% and 25.6% during 2016-2020, respectively. M&A deal volume and value also increased at a CAGR of 30.9% and 0.2% during the past five years, respectively.
Aurojyoti Bose, Lead Analyst at GlobalData, comments: 'Although COVID-19 impacted the deal-making sentiments, the impact was more profound in terms of deal value, which could also be attributed to distressed valuation of assets. However, with the increased remote working exposure making organizations more susceptible to cyberattacks, businesses around the world are also working to strengthen their cybersecurity. Considering the extended usage of cyber tools, the future for deal activity in the space looks promising.'
The number of M&A deals announced in the cybersecurity space increased by 9.3% from 419 in 2019 to 458 in 2020. However, the corresponding deal value declined by 30.1% from US$52.8bn in 2019 to US$36.9bn in 2020.
Bose adds: 'M&A deal volume in the cybersecurity space managed to maintain its growth trajectory over the years between 2016-2020. Meanwhile, M&A deal value registered continuous decline in 2019 and 2020 after recovering in 2018.'