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Next-gen Cybersecurity

AI-based solutions for evolving digital threats

Overview

Emerging threats require proactive tools that take a holistic view of corporate networks

Corporate cybersecurity today is tasked with protecting connected hardware and cloud-based software from myriad threats such as unauthorized access and data theft. The next-generation of tools leverage AI and machine learning to dominate endpoint protection, detection, and response.

The traditional enterprise network perimeter is fading and enterprise workflows are increasingly reliant on the internet and cloud applications. Personal computing devices and connected industrial hardware connect to corporate networks on a daily basis, leaving many potential entry points for malicious actors. The evolving threat landscape requires a holistic approach to cybersecurity that considers an organization's entire network landscape.

Advances in AI help companies bridge this gap by detecting threats using behavioral analysis. Companies can now use signature-based methods to identify threats proactively, even unknown ones which would have otherwise gone undetected by traditional antivirus programs. AI also allows for efficient monitoring, investigation, and automation of common remediation tasks that would have been traditionally carried out manually—a time-consuming process prone to error.

What's driving this industry?
Market Sizing

The US market for next-generation cybersecurity could reach up to USD 28.1 billion by 2025

Conservative case

USD 15.0 Bn

Base case

USD 21.5 Bn

Expansion case

USD 28.1 Bn

USD billion0102030202020212022202320242025
View details

COVID-19 IMPACT

The rapid shift to remote work has led to new threats: 

  • Phishing attacks grew 220% in 2020, leading to a lack of confidence in current corporate cybersecurity efforts.

  • The FBI received 3,000 - 4,000 daily complaints related to cybersecurity, that’s up to 4x beyond pre-pandemic rates.

  • More than 70% of cybersecurity leaders cite remote workers as security risks and 41% blame budgetary restrictions as their top concern.

Prioritizing security translates to double-digit revenue for several disruptors: 

  • Crowdstrike saw 82% year-over-year (YoY) growth in both customers and revenue.

  • Cato Networks doubled annual recurring revenue (ARR).

  • Arctic Wolf more than doubled subscription revenue with enterprise clients growing 180%.

  • Snyk reported a 275% YoY growth in ARR.

  • SentinelOne expected revenue growth to more than double in 2020.

Security budgets are going up across industries:

  • More than 50% of surveyed executives plan to increase their cybersecurity budgets in 2021 with the healthcare sector leading the way.

View detail

Market Mapping


Large incumbents maintain a strong presence in this industry as they expand traditional cybersecurity portfolios with complementary products focused on cloud services produced through a mix of internal development and acquisitions. Some larger disruptors also follow an acquisition strategy, acquiring smaller startups to expand their portfolios. These acquisitive incumbents and larger disruptors are therefore listed across multiple segments of the market map.

The endpoint security space, in particular, has a significant incumbent presence, as traditional antivirus software vendors are adding behavior analytics and artificial intelligence to their products. Symantec (now owned by Accenture) and Trend Micro are some of the largest endpoint protection providers globally, each claiming more than 18% of the segment’s overall market share.

While the market map features more endpoint security companies than any other segment, companies offering cloud security products have attracted the most private funding—more than USD 7.1 billion for the cloud network and cloud-native application security segments as of August 2021. Further, nine out of ten startups in this hub were established over the last decade and have collectively raised over USD 12 billion as of the same date.

Incumbents
Growth
Early
Seed
Pre-Seed
Cloud network security
?
Cloud-native application security
?
Endpoint security
?
Industrial IoT/Operational technology security
?
Detection and response tools
?
Managed detection and response (MDR)
?
API and web application security
?
SecurityScorecard
SecurityScorecard
SecurityScorecard
SecurityScorecard
SecurityScorecard
SecurityScorecard
SecurityScorecard
Microsoft
Google
IBM
Palo Alto Networks
Check Point
Rapid7
Sophos
Fortinet
Kaseya
Kaspersky Lab
Trend Micro
Barracuda Networks
Neosecure
Forcepoint
Akamai
Pixel Holdco (Cyphra)
Dell Technologies
VMware
Accenture
Thales
Securonix
Netskope
Sysdig
Orca Security
Wiz
Illumio
Cato Networks
Devo Technology
Vectra
Lookout
Menlo Security
Darktrace
Versa Networks
iboss
Armor
Zscaler
Proofpoint
Coro
Perimeter 81
Axis Security
Sonrai Security
Cyolo
Banyan Security
Adaptive Shield
Elisity
Blumira
Dig Security
Cyscale
HWG Cyber Security
Trellix
Wing Security
Lightspin
Mondoo
Acreto
Tenacity
C3M
Microsoft
IBM
Palo Alto Networks
Check Point
Rapid7
Sophos
Trend Micro
Neosecure
Dell Technologies
VMware
F5 Networks
Tenable
Lacework
Snyk
Sysdig
CrowdStrike
Aqua Security
Armor
VirSec
Traceable AI
Laminar
Monad
DeepFactor
Trellix
Dazz
Slim.AI
Lightspin
Mondoo
Scribe Security
Oxeye Security
Tromzo
Akeero
Microsoft
IBM
Palo Alto Networks
Check Point
Acronis
Tanium
Rapid7
Blackberry
Sophos
RSA Security
Fortinet
BitDefender
F-Secure
Kaspersky Lab
Trend Micro
Dell Technologies
VMware
Accenture
Jamf
OpenText (Bricata)
BAE Systems
Thales
Cybereason
SentinelOne
Illumio
CrowdStrike
Devo Technology
Lookout
Deep Instinct
Darktrace
Armor
ThreatLocker
EclecticIQ
Attivo Networks
Morphisec
Portnox
SolCyber
RevBits
ZecOps
CrowdSec
AaDya Security
HWG Cyber Security
Trellix
Surefire Cyber
BreachQuest
Microsoft
IBM
Palo Alto Networks
Check Point
Tanium
Blackberry
RSA Security
Fortinet
Kaspersky Lab
Neosecure
Forcepoint
DNV
Accenture
Nuvolo
F5 Networks
Tenable
BAE Systems
ForeScout Technologies
Thales
SentinelOne
Claroty
Armis Security
Dragos
Vectra
Darktrace
Nozomi Networks
Fortress
VirSec
OPSWAT
Ordr
Attivo Networks
Cyolo
Shift5
Xage Security
Cylus
Phosphorus Cybersecurity
Scope Security
Cynerio
Sternum
SAM Seamless Network
Karamba Security
Mission Secure
Portnox
NanoLock Security
Cylera
Network Perception
Airgap Networks
Viakoo
Shield-IoT
Dellfer
RazorSecure
Acreto
SynSaber
Suavei
InsightCyber
Microsoft
Google
IBM
Palo Alto Networks
Check Point
Acronis
Tanium
Rapid7
Blackberry
Sophos
RSA Security
Fortinet
Kaseya
BitDefender
F-Secure
Kaspersky Lab
Trend Micro
Barracuda Networks
Forcepoint
VMware
Accenture
F5 Networks
Crossword Cybersecurity
OpenText (Bricata)
ForeScout Technologies
Thales
Securonix
Cybereason
SentinelOne
CrowdStrike
Devo Technology
IronNet Cybersecurity
Exabeam
Vectra
ReliaQuest
SecurityScorecard
Corelight
ZeroFOX
Hunters
Ordr
Uptycs
Proofpoint
EclecticIQ
ExtraHop
LogPoint
Panther Labs
ReversingLabs
Laminar
Stellar Cyber
Adlumin
Netography
Phosphorus Cybersecurity
Mitiga
Confluera
SenseOn
Query.AI
RevBits
Anvilogic
Blumira
ZecOps
Dig Security
ThreatWarrior
AaDya Security
AgileBlue
ORNA
HWG Cyber Security
Trellix
Stairwell
Surefire Cyber
Tenacity
ContraForce
BitLyft
Google
IBM
Palo Alto Networks
Check Point
Acronis
Rapid7
Blackberry
Sophos
Fortinet
Kaseya
BitDefender
F-Secure
Kaspersky Lab
Trend Micro
Neosecure
Pixel Holdco (Cyphra)
Dell Technologies
Accenture
Jamf
IK Partners (Truesec)
OpenText (Bricata)
BAE Systems
Thales
Securonix
Cybereason
SentinelOne
BlueVoyant
Arctic Wolf
CrowdStrike
SecurityScorecard
Expel
Critical Start
ZeroFOX
Armor
LogPoint
Red Canary
deepwatch
[redacted]
Huntress
Adlumin
ActZero
Mitiga
SolCyber
Cyvatar.ai
Blackpoint Cyber
AgileBlue
Quorum Cyber
Theta432
ORNA
HWG Cyber Security
Trellix
CYSIAM
CyberMaxx
Surefire Cyber
UncommonX
BreachQuest
BitLyft
Startup Defense
Google
Palo Alto Networks
Check Point
Rapid7
Fortinet
Barracuda Networks
Akamai
Pixel Holdco (Cyphra)
Fastly
VMware
F5 Networks
Tenable
Crossword Cybersecurity
Salt Security
Darktrace
PerimeterX
VirSec
Proofpoint
Noname Security
Cequence Security
Traceable AI
Kasada
ThreatX
Netacea
Feroot Security
Invicti Security
Valence Security

The Disruptors


A majority of these disruptors offer tools for threat detection and response either as standalone products or along with cloud security and endpoint security offerings. As of August 2021, the highest amount of funding has gone towards companies in the detection and response segment.

Several next-generation cybersecurity companies have already reached valuations of at least USD 1 billion. Cloud-network security startup Netskope has garnered the highest amount of funding (USD 1 billion) as of August 2021. SentinelOne went public in June 2021 which valued the company at USD 8.9 billion, implying a 187% growth from the valuation during its last fundraise in November 2020 (USD 3.1 billion). SentinelOne also leads the endpoint security, industrial IoT/operational technology security, and managed detection and response (MDR) segments in terms of funding, with Arctic Wolf being the highest funded pureplay MDR provider in this space.

More than 90% of these disruptors were established in the last decade and most are in either the early or growth stage. Many also have a footprint across multiple market segments in part by acquiring smaller startups to accelerate product launches and absorb expertise amid a shortage of cybersecurity professionals.

Cloud network security

?

Disruptors

?
Funding in USD Millions
Zscaler
Public - Market cap USD 22.0 bn
Darktrace
Public - Market cap USD 2.5 bn
Securonix
1065
Netskope
1042
Sysdig
730
Orca Security
632
Wiz
600
Illumio
558
Cato Networks
532
Devo Technology
481
Vectra
353
Lookout
282
Menlo Security
251
Versa Networks
196
iboss
180
Perimeter 81
165
Armor
149
Axis Security
100
Sonrai Security
89
Proofpoint
86
Cyolo
85
Coro
80
Banyan Security
47
Adaptive Shield
34
Elisity
34
Wing Security
26
HWG Cyber Security
Unknown
Trellix
Unknown
Watchlist
?
Lightspin
Mondoo
Blumira
Dig Security
Acreto
Cyscale
Tenacity
C3M

Cloud-native application security

?

Disruptors

?
Funding in USD Millions
CrowdStrike
Public - Market cap USD 41.6 bn
Lacework
1899
Snyk
850
Sysdig
730
Aqua Security
265
Armor
149
VirSec
135
Traceable AI
80
Laminar
67
Dazz
60
Slim.AI
59
Trellix
Unknown
Watchlist
?
Lightspin
Monad
Mondoo
DeepFactor
Scribe Security
Oxeye Security
Tromzo
Akeero

Endpoint security

?

Disruptors

?
Funding in USD Millions
CrowdStrike
Public - Market cap USD 41.6 bn
SentinelOne
Public - Market cap USD 6.6 bn
Darktrace
Public - Market cap USD 2.5 bn
Cybereason
751
Illumio
558
Devo Technology
481
Lookout
282
Deep Instinct
259
Armor
149
ThreatLocker
124
EclecticIQ
77
Attivo Networks
60
Morphisec
50
HWG Cyber Security
Unknown
Trellix
Unknown
Watchlist
?
Portnox
SolCyber
RevBits
ZecOps
Surefire Cyber
CrowdSec
AaDya Security
BreachQuest

Industrial IoT/Operational technology security

?

Disruptors

?
Funding in USD Millions
SentinelOne
Public - Market cap USD 6.6 bn
Darktrace
Public - Market cap USD 2.5 bn
Claroty
640
Armis Security
537
Dragos
364
Vectra
353
Nozomi Networks
166
Fortress
160
VirSec
135
OPSWAT
125
Ordr
94
Cyolo
85
Xage Security
61
Attivo Networks
60
Cylus
57
Phosphorus Cybersecurity
43
Scope Security
38
Cynerio
37
Sternum
36
SAM Seamless Network
36
Karamba Security
30
Watchlist
?
Shift5
Mission Secure
Portnox
NanoLock Security
Cylera
Network Perception
Airgap Networks
Viakoo
Shield-IoT
Dellfer
RazorSecure
Acreto
SynSaber
Suavei
InsightCyber

Detection and response tools

?

Disruptors

?
Funding in USD Millions
CrowdStrike
Public - Market cap USD 41.6 bn
SentinelOne
Public - Market cap USD 6.6 bn
IronNet Cybersecurity
Public - Market cap USD 213.4 mn
Securonix
1065
Cybereason
751
Devo Technology
481
Exabeam
390
Vectra
353
ReliaQuest
330
SecurityScorecard
292
Corelight
159
ZeroFOX
154
Panther Labs
141
Hunters
118
Ordr
94
Uptycs
93
Proofpoint
86
ReversingLabs
81
EclecticIQ
77
Laminar
67
ExtraHop
62
Stellar Cyber
60
Adlumin
48
Netography
48
Phosphorus Cybersecurity
43
LogPoint
40
Mitiga
32
Confluera
29
SenseOn
26
HWG Cyber Security
Unknown
Trellix
Unknown
Watchlist
?
Stairwell
Query.AI
RevBits
Anvilogic
Blumira
ZecOps
Dig Security
Surefire Cyber
ThreatWarrior
AaDya Security
AgileBlue
Tenacity
ContraForce
BitLyft
ORNA

Managed detection and response (MDR)

?

Disruptors

?
Funding in USD Millions
CrowdStrike
Public - Market cap USD 41.6 bn
SentinelOne
Public - Market cap USD 6.6 bn
Securonix
1065
Cybereason
751
BlueVoyant
526
Arctic Wolf
498
SecurityScorecard
292
Expel
258
Critical Start
255
ZeroFOX
154
Armor
149
Red Canary
130
deepwatch
76
[redacted]
60
Huntress
60
Adlumin
48
LogPoint
40
ActZero
40
Mitiga
32
HWG Cyber Security
Unknown
Trellix
Unknown
Watchlist
?
SolCyber
Cyvatar.ai
Blackpoint Cyber
Surefire Cyber
UncommonX
AgileBlue
BreachQuest
Quorum Cyber
BitLyft
Theta432
ORNA
Startup Defense
CYSIAM
CyberMaxx

API and web application security

?

Disruptors

?
Funding in USD Millions
Darktrace
Public - Market cap USD 2.5 bn
Salt Security
271
Noname Security
220
PerimeterX
149
VirSec
135
Cequence Security
102
Proofpoint
86
Traceable AI
80
Kasada
39
Watchlist
?
ThreatX
Netacea
Feroot Security
Valence Security
Invicti Security

Zscaler

Zscaler offers cloud security products such as cloud access security brokers (CASBs), secure web gateways (SWGs), and other tools to protect cloud networks, under a secure access service edge (SASE) architecture that is distributed across more than 150 data centers globally. Zscaler also offers cloud security posture management (CSPM) tools that enable organizations to identify misconfigurations and vulnerabilities across cloud-native workloads. As of May 2021, the company had more than 200 patents issued and pending, and served more than 5,000 customers including more than 25% of the Fortune 200.

For FY2021, Zscaler reported USD 673.1 million in revenues, reflecting a growth of 56% YoY. Zscaler’s adjusted operating income rose to USD 78 million, more than double the USD 38.2 million recorded during FY2020. For Q1 FY2022 (ended October 31, 2021), the company reported a revenue of USD 230.5 million, representing a year-over-year (YoY) growth of 62%. Management guidance for revenue for FY2022 stands in the range of USD 1 billion and USD 1.01 billion, which implies an YoY growth of 48.6% to 50.1%, respectively.

Zscaler has made several acquisitions including the cloud security startup Edgewise Networks, in May 2020 for an undisclosed amount, to enhance application-to-application communication security. In April 2020, the company acquired the CSPM startup Cloudneeti for an undisclosed amount, enabling Zscaler to expand its cloud security offering to offer CSPM solutions. Other notable acquisitions of the company include Trustdome, and Smokescreen Technologies in April 2021 and May 2021, respectively. The company commenced trading on the Nasdaq in March 2018, raising USD 192 million in its initial public offering (IPO).

Segment:
Cloud network security
Total funding:
USD 148.0 million
Competitors:
Netskope, Cato Networks, Lookout, Menlo Security, iboss, Bitglass
Disruptor Funding History

Cloud network security:

Zscaler
Darktrace
Securonix
Netskope
Sysdig
Orca Security
Wiz
Illumio
Cato Networks
Devo Technology
Vectra
Lookout
Menlo Security
Versa Networks
iboss
Perimeter 81
Armor
Axis Security
Sonrai Security
Proofpoint
Cyolo
Coro
Banyan Security
Adaptive Shield
Elisity
Wing Security
Lightspin
Mondoo
Blumira
Dig Security
Acreto
Cyscale
Tenacity

Cloud-native application security:

CrowdStrike
Lacework
Snyk
Sysdig
Aqua Security
Armor
VirSec
Traceable AI
Laminar
Dazz
Slim.AI
Lightspin
Monad
Mondoo
DeepFactor
Scribe Security
Oxeye Security
Tromzo
Akeero

Endpoint security:

CrowdStrike
SentinelOne
Darktrace
Cybereason
Illumio
Devo Technology
Lookout
Deep Instinct
Armor
ThreatLocker
EclecticIQ
Attivo Networks
Morphisec
Portnox
SolCyber
RevBits
ZecOps
Surefire Cyber
CrowdSec
AaDya Security
BreachQuest

Incumbents


Incumbents buy the future with acquisitions of next-generation cybersecurity startups

The cloud service providers, pureplay cybersecurity companies, and endpoint security software providers in this section have either acquired stakes in next-gen startups, or pivoted their business model to offer products and services across multiple segments.

Major cloud providers like Microsoft and Fastly generally bundle security products along with their primary offerings. Pureplay cybersecurity incumbents, such as Palo Alto Networks, have been gradually building their product portfolio to keep up with industry trends, using acquisitions to bridge gaps and speed up go-to-market activities.

Incumbents in the endpoint security segment have historically offered traditional antivirus software to retail and enterprise customers. These companies have improved their offering to feature AI and behavior analytics to detect known and unknown threats. These companies have also started building endpoint detection and response (EDR) tools to leverage automation and machine learning.

Cloud network security
Cloud-native application security
Endpoint security
Industrial IoT/Operational technology security
Detection and response tools
Managed detection and response (MDR)
API and web application security
In House Development
M&A
Partnership
Investment

Notable Investors


No investor data is available

Funding data are powered by Crunchbase
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