The March 2017 security technology report by Venture Scanner provides an overview of the security technology sector, detailing its landscape, categories, and trends. It highlights the emergence of 14 categories of security startups, with substantial funding amounts totaling $21 billion across various areas including threat detection and identity security. Additionally, the report indicates a notable increase in venture capital funding and acquisitions within the sector, reflecting its growing significance and activity.

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Security Technology
Startup Landscape Trends and Insights
March, 2017

2. Security technology report outline
2
This report provides an overview of the security technology sector and is
broken down into three sections
Sector Description
High-level sector metrics
with sub-category
definitions
Trends & Insights
Infographics and data
points for the security
technology sector
Quarterly Activity
Major funding and exit
events from the previous
90 days
Venture Scanner reports are built by analysts utilizing our startup
database and landscaping platform

3. Security Technology
Sector Description
3

4. Security tech startups are creating new businesses in 14 categories
The graphic above shows a sampling of companies in each category, stats as of February 2017 4
Security
Technology
Learn about our full 830 company
report with $21B in funding
Security Intelligence/Analytics
Threat Detection/Mitigation
Cloud/Hosting Security Data/Information Security Mobile Security Identity/Fraud Security Industrial Security
Risk Assessment/Compliance
Endpoint Security/Firewalls
z z
Application Security Email Security Brand Protection Computer Forensics Security Hardware

5. Innovation quadrant for security technology
AVERAGE FUNDING ($M)
AVERAGEAGE(YEARS)
ESTABLISHED HEAVYWEIGHTS
PIONEERS DISRUPTORS
This quadrant shows a relative segmentation of the categories with respect to one another, Feb 2017 5
Email Security
Endpoint Security
Computer Forensics
Brand Protection
Risk Assessment
Source Code
Security
Industrial
Security
Security
Hardware
Identity
Security
Data Security
Cloud
Security
Security
Analytics
Mobile Security
Threat
Detection

6. Security technology startups play in many different categories (1 of 3)
6
Application and Source Code Security
64 Startups, $1.7B Total Funding
Companies that scan code bases for potential
loopholes, including runtime security and
performance management
Cloud and Hosting Server Security
121 Startups, $3.5B Total Funding
Companies that protect servers from being
atttacked, including cloud servers used for
applications, infrastructure, and data files
Data and Information Security
196 Startups, $3.2B Total Funding
Companies that help protect electronic data
from unauthorized external access or threats,
including information assurance
Brand Protection
21 Startups, $358M Total Funding
Companies that help protect a brand’s public
image on the internet, including domain name
monitoring and reputation management
Computer Forensics
28 Startups, $1B Total Funding
Companies that monitor and review computer
usage for criminal investigation and evidence
acquisition purposes
Email Security
34 Startups, $1.1B Total Funding
Companies that focus on producing security
solutions for email platforms, including
products for anti-spam and anti-phishing
Category stats as of February 2017

7. Security technology startups play in many different categories (2 of 3)
7
Endpoint Security and Firewalls
105 Startups, $3.9B Total Funding
Companies that protect devices connected to a
network (as opposed to the network itself),
including anti-virus and firewall programs
Infrastructure and Industrial Security
59 Startups, $503M Total Funding
Companies that protect the operations of
infrastructure and industrial facilities, such as
power plants, electricity grids, and factories
Risk Assessment and Compliance
114 Startups, $2B Total Funding
Companies that assess the security level of
enterprise networks and ensure that they
comply with relevant standards
Identity and Fraud Security
177 Startups, $2.3B Total Funding
Companies that authenticate identities,
approve access within a system, and monitor
activities to prevent fraud
Mobile Security
65 Startups, $1.7B Total Funding
Companies that protect portable devices, such
as smartphones or tablets, from threats
associated with mobile computing
Security Hardware
34 Startups, $882M Total Funding
Companies that produce hardware
components for digital security solutions, such
as VPN routers and controller access points
Category stats as of February 2017

8. Security technology startups play in many different categories (3 of 3)
8
Security Intelligence and Analytics
105 Startups, $2.9B Total Funding
Companies that collect data and then produce
actionable analytics on network security to
predict and optimize performance over time
Threat Detection and Mitigation
228 Startups, $6.4B Total Funding
Companies that activity monitor a network to
detect attacks and help to mitigate them by
responding in real time
Category stats as of February 2017

9. Security Technology
Sector Trends & Insights
9

10. 10
Investing into security technology happens in a variety of categories
The threat detection category accounts for 20% of venture funding and 17%
of total companies in the security technology startup sector
Venture Investing in Security Technology
Companies are categorized by function, and therefore can exist in multiple categories. Feb 2017
-
50
100
150
200
250
0
1
2
3
4
5
6
7
CompanyCount
TotalFunding($B)
VC Funding Count

11. 11
VC funding into security technology has been growing
Overall Security Tech VC funding grew at a CAGR of 46% from 2011-2016
Security Technology Funding Over Time
Data as of February 2017
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
TotalFunding($B)

12. 12
Security technology startups continue to show traction
Security Technology Funding Amount by Round
Recent years have seen a general increase in all financing rounds, implying
startups of all stages are demonstrating success
Graph shows only the funding types listed therein, data as of Feb 2017
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
FundingAmount($B)
Late Stage Series D Series C Series B Series A Seed

13. 13
Security technology startups founded in 2013 lead in VC funding
Startups founded in 2013 account for 16% of the sector funding over the last
decade, and include companies like Illumio, SentinelOne, and Darktrace
Security Technology Funding By Vintage Year
Data as of February 2017
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
TotalFunding($B)
Year Founded

14. 14
Security technology startups are a global phenomenon
Security Technology Startup Count by Country
0 440
Companies
Data as of February 2017

15. 15
Top VC investors are making bets into the security technology sector
Selected Investor Activity in Security Technology
The above count represents a subset of overall investor activity, Feb 2017
0
10
20
30
40
50
60
NumberofInvestments
Number of Investments Number of Companies Backed

16. 16
Security technology exit activity has been dominated by acquisitions
Exit events within security technology grew by 440% between
2011 and 2016
Security Technology M&A and IPO Events
Data as of February 2017
0
5
10
15
20
25
30
35
40
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
NumberofExits
Public Acquired

17. Security Technology
Quarterly Notable Events
17

18. 18
Recent security technology funding statistics
There have been 77 security technology funding events since Nov 2016
Recent Security Technology Funding Round Counts
Graph shows only the funding types listed therein, Feb 2017
0
2
4
6
8
10
12
14
16
18
20
Seed Series A Series B Series C Series D Late Stage
FundingEventCount

19. 19
Recent security technology funding events
Notable Recent Security Technology Funding Events
Company Funding Type Amount Date
Series B $165,000,000 Jan 23, 2017
Series C $70,000,000 Jan 25, 2017
Series C $60,00,000 Nov 17, 2016
Series E $50,000,000 Jan 23, 2017
Series C $45,000,000 Jan 6, 2017
Security tech startups raised $1.1 billion since Nov 2016
Data as of February 2017

20. 20
Notable recent security technology exit events
Notable Recent Security Technology Acquisitions
Company Acquirer Amount Date
$3,700,000,000 Jan 24, 2017
$1,800,000,000 Dec 14, 2016
$1,600,000,000 Jan 30, 2017
$650,000,000 Jan 17, 2017
$120,000,000 Feb 8, 2017
There have been 20 exit events since Nov 2016, all
of which have been acquisitions
Data as of February 2017

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