Security Alert: Cybersecurity Startup M&A On Pace For Weakest Year Since 2017
Crunch Base – Chris Metinko
Summary: This article discusses the slow pace of M&A deals in the cybersecurity sector in 2021, and the potential reasons for this. Key takeaways: 1) M&A dealmaking in cybersecurity hit a high in 2021, with 123 VC-backed companies being bought, but this number has since fallen to only 34 in the first seven months of 2021) 2) Rising interest rates, geopolitical tensions, and an uneasy economy have caused some companies to rein in their IT and cybersecurity spending, leading to fewer large deals. 3) Private equity firms and strategics are beginning to show more interest in M&A deals, and areas such as cloud security, AI, fraud detection, and identity and access management could be prime for consolidation. Counter arguments: 1) Startups have not needed to come off their high valuations since they have been able to raise large amounts of cash in the past few years. 2) It is still uncertain whether the market will pick back up, as it depends on sky-high valuations from 2021 coming back to a more realistic level.
Link: https://news.crunchbase.com/cybersecurity/cyber-startup-merger-acquisition-slows-ai-2023?utm_source=cb_daily&utm_medium=email&utm_campaign=20230824&utm_content=intro&utm_term=content&utm_source=cb_dai