Cyber Security Investing: A Money Pit?
January 22, 2024
This essay is the work of a dumb dinobaby. No smart software required.
Cyber security is a winner, a sure-fire way to take home the big bucks. Slam dunk. But the write up “Cybersecurity Startup Funding Hits 5-Year Low, Drops 50% from 2022” may signal that some money people have a fear of what might be called a money pit. The write up states:
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.
Have investors in cyber security changed their view of a slam-dunk investment? That winning hoop now looks like a stinking money pit perhaps? Thanks, MSFT Copilot Bing thing with security to boot. Good enough.
Let’s believe these data which are close enough for horseshoes. I also noted this passage:
“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.
The reference to Israel is bittersweet. The Israeli cyber defenses failed to detect, alert, and thus protect those who were in harm’s way in October 2023. How you might ask because Israel is the go-to innovator in cyber security? Maybe the over-hyped, super-duper, AI-infused systems don’t work as well as the marketer’s promotional material assert? Just a thought.
My views:
- Cyber security is difficult; for instance, Microsoft’s announcement that the Son of SolarWinds has shown up inside the Softies’ email
- Bad actors can use AI faster than cyber security firms can — and make the smart software avoid being dumb
- Cyber security requires ever-increasing investments because the cat-and-mouse game between good actors and bad actors is a variant of the cheerful 1950s’ arms race.
Do you feel secure with your mobile, your laptop, and your other computing devices? Do you scan QR codes in restaurants without wondering if the code is sandbagged? Are you an avid downloader? I don’t want to know, but you may want answers.
Stephen E Arnold, January 22, 2024
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