PODCAST: Want to know what the No. 1 cybersecurity VC firm is betting $300 million on? Give a listen

By Byron V. Acohido

In 2016, venture capital firms invested in more startups than ever before. The year saw venture VC firms invest a total of $3.1 billion in 279 cybersecurity startups. This compares to $3.7 billion of investment in 272 startups in 2015 and $833 million in 117 startups in 2010.

Levels of investment look set to continue into 2017. The first two months of the year saw the industry attract more than $300 million of funding. Trident Capital Cybersecurity alone has raised $300 million to invest in cybersecurity startups.

Related article: How venture capital is helping to commercialize government research

The surge in investment comes on the back of record data breaches in 2016 and calls by President Trump and other world leaders to crack down on cybersecurity. In total, more than 4.2 billion records were exposed last year, smashing the previous record of 1.1 billion records set in 2013.

I had the chance to sit down with Trident Capital Cybersecurity Managing Director, Alberto Yépez at Black Hat 2017 in Las Vegas. We discussed the world of cybersecurity venture capitalism and how his firm and others are looking to increase their involvement in the industry.

Looking to Managed Security Service Providers (MSSPs). There are two main reasons why Yépez and other VCs are looking at MSSPs. The first is a shortage of cyber professionals. Regardless of your source, there are about a million jobs in cybersecurity. It is incredibly hard to recruit and retain talent. The second is the lack of a single unifying platform that can secure everything. Instead, multiple platforms are trying to secure multiple different components. Because executives aren’t able to acquire these things on their own, they are asking if they can buy security as a service. As the problems grow, the popularity of MSSPs will grow, too.

Looking toward securing the Internet of Things (IoT). As more devices become connected, security is going to become an enormous issue. VCs like Yépez are looking at this on several different fronts—for industries and individuals. Trident already is working with GE, ABB, and Siemens. But they also are looking at investing in next generation identity recognition platforms to stop personal data and credentials from being compromised.


Looking to get actively involved as investors. In the cybersecurity industry, investors aren’t going to sit silently. Instead, they are going to get involved and to help startups scale. They’re also bringing their relationships to the table, giving these fledgling companies access to the best channels across the world. VCs aren’t just people trying to get ahead of the problem, they’re trying to build global companies that are here to stay.

More stories about venture capital investing in cybersecurity:
Venture capitalists start to tap into cybersecurity potential
Despite changing landscape, VC investment in cybersecurity still strong
VC firm seeks portfolio of start-ups to suppress cyber adversaries

This article originally appeared on ThirdCertainty.com

(Editor’s note: Last Watchdog has supplied consulting services to Trident Capital.)

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