8 of the Biggest Cybersecurity M&As & Investment Deals in 2021

There were more financial deals in cybersecurity last year than in any previous year.

9 Slides

The cybersecurity industry witnessed an unprecedented level of venture capital funding and mergers and acquisitions (M&A) activity in 2021.

M&A volume tripled over 2020, and venture capital funding doubled over last year, according to data compiled by Momentum Cyber.

Total M&A volume hit an impressive $77.5 billion in 2021, while the total volume of investment funding topped $29.5 billion. In all, there were 1,043 funding deals and 286 M&A transactions. Of this, 14 of the M&A deals involved transactions of $1 billion or more, while 83 of the funding deals topped $100 million. They were more private equity investments in cybersecurity — 130 — than in any previous year. Last year also witnessed more than 30 cybersecurity firms top a $1 billion valuation for the first time, according to Momentum Cyber

Sectors that attracted the most investment activity included cloud security, identity and access management, and endpoint security.

Dave DeWalt, founder of late-stage cybersecurity VC firm NightDragon, says a lot of the activity was driven by the rapidly changing threat landscape. "Historically, whenever we have entered a threat super cycle, like the one we saw in 2021, we have seen company budgets and venture capital investment increase to compensate," he says. "Today we are in the most aggressive threat landscape we have ever seen, so it only makes sense that we are seeing record levels of investment pour into cybersecurity from venture capital, corporate M&A, and private equity." 

DeWalt describes the rapid rise in private equity interest in cybersecurity in 2021 as interesting and says he does not expect the current investment cycle to decelerate anytime soon.

Bob Ackerman, founder of early-stage cybersecurity VC firm AllegisCyber Capital, also expects that dollars will continue to pour into cyber. But expect some changes, he says. "There may be a rationalization of the market where the sectors that are overcapitalized, with too many players with too little differentiation, may see consolidation through M&A." 

Two security areas he thinks where this could happen: threat intelligence and endpoint security.

Here are eight of 2021's biggest transactions — four M&A deals and four investment rounds.

About the Author(s)

Jai Vijayan, Contributing Writer

Jai Vijayan is a seasoned technology reporter with over 20 years of experience in IT trade journalism. He was most recently a Senior Editor at Computerworld, where he covered information security and data privacy issues for the publication. Over the course of his 20-year career at Computerworld, Jai also covered a variety of other technology topics, including big data, Hadoop, Internet of Things, e-voting, and data analytics. Prior to Computerworld, Jai covered technology issues for The Economic Times in Bangalore, India. Jai has a Master's degree in Statistics and lives in Naperville, Ill.

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