Cybersecurity startup valued at $1bn

Cybersecurity startup valued at $1bn

Cylance, a cybersecurity startup that uses algorithms and artificial intelligence, has been valued at $1bn following a round of fundraising that secured more than $100m in private equity investment.

The high valuation,a threefold increase on its 2015 valuation of $300m, is a sign of the growing investor interest in the cybersecurity market amid a concern that many of the longstanding cybersecurity companies are failing to address new cyberthreats.
 
Cybersecurity has also become a much greater concern in the banking industry of late following a series of breaches involving central banks and interbank messaging network Swift.
 
Cylance was formed in 2012 by Stuart McClure, a former employee at anti-virus software firm McAfee (now known as Intel Security). Its platform employs a suite of algorithm-based security protocols that inspect networks for weaknesses and shuts down any that are detected, claims the company.
 
The use of algorithms and artificial intelligence as well as machine learning and big data analytics is on the rise in the cybersecurity market and has helped to break a freeze in funding that had taken hold after private equity firms spent a number of years pouring money into the market but finding little reward as cyberattacks increased.
 
The latest round of investment for Cylance featured PE firms like Blackstone and KKR and followed earlier fundraising efforts which brought in more than $70m. Other cybersecurity startups have also undergone successful fundraising such as mobile security company Zimperium which secured an undisclosed sum of investment from Microsoft.
 
However some investors may be wary of Cylance's rapidly rising valuation and will recall the fate of Baltimore Technologies, an Irish internet security startup from the late 1990s that became the darling of the stock market with a market cap of $7bn and share value of £15 at its peak in 2000. It then fell from grace and was valued at just £19m with shares at 37p just four years later.

Comments: (2)

Hitesh Thakkar
Hitesh Thakkar - FIS Payments Software and Services India - India 09 June, 2016, 12:031 like 1 like

It is old trick of Inflating valuation as I can put my dollar on Ten such companies which does similar work.

Need to find those advisors who misled Investor community with such inflated valuation !!!

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 09 June, 2016, 18:50Be the first to give this comment the thumbs up 0 likes

It's not about the idea or the product. It's all about execution. Companies who get this will enjoy stratospheric valuation compared to the others who don't, even if those others were earlier to market. That has been the lesson from Microsoft, Cisco, Google, Apple, Facebook et al since times immemorial. Of course, anything can happen tomorrow - even Microsoft and Cisco have, at some point, suffered >50% drop in valuation from their respective peaks.

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