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The Critical Challenges for Cybersecurity Startups

By CIOReview | Monday, August 13, 2018

In the wake of innumerable cyberattacks, a number of cybersecurity startups have been founded with the mission to ensure strong security. However, largely overwhelmed by the improvements in the security landscape, and more sophisticated technological advancement used by enterprises to lock customers have left the startups at a disadvantage. In a market that is growing drastically, several organizations are observed to hit the sideline, while the bigger players zoom past in the security race.

Although there are several organizations and investors who fund cybersecurity startups, organizations that have managed to withstand the innovation storm are few. In this market, several organizations turn into what is referred to as corporate “zombies”, the ones will sparse potential of getting a decent cost in an IPO or being targeted for acquisition.

Apart from the way the cyberthreats have evolved, the way security firms are utilized has changed drastically. In order to economize on the cost and effort, several organizations have brought together their security requirements, sourcing them to bigger players instead of spreading it to startups. Besides, there is a large scope for researchers who are employed on contract to detect security weaknesses in an organization.  

According to an advisory firm whose expertise revolves around merger and acquisitions in the cyber space, the number of security firms is close to double compared to those three years ago, while at least 300 new startups are launched every year. While holding between $100-$300 million value, several startups proffer great exit opportunities. Some of the larger startups have chosen to hold up their IPO and opt to go public.

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