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2018 Cybersecurity Venture Capital Investment Reaches Record $5.3B, Nearly Double that of 2016

2018 proved to be an active year for cybersecurity investing, with record highs in dollars invested which included increased average deal size, continued rise of investment outside of the US, a busy M&A and IPO market. According to a report by Strategic Cyber Ventures, Asia and Europe, together, now account for 22.6% of global investment in cybersecurity companies, double that of 2014 (12.7%), and as high as 24.1% in 2016. But the report notes California continues to lead the way, alone, accounting for almost half of global investment in cybersecurity companies in 2018 (46%).

This rate of investment is not sustainable, says Strategic Cyber Ventures. "This is the case with the broader tech ecosystem as a whole… In cybersecurity, there are likely many zombies out there. They've raised big rounds, growth has slowed, perhaps due to vendor fatigue or increased competition, and now these companies can't raise at increased valuations from prior rounds, or at all, and are being propped up by existing investors that will eventually grow weary of keeping them alive. These companies will eventually float to the surface over the next few years with less than desirable outcomes for investors and founders."

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