Cybersecurity is a $81.7 billion market — and startups are raking in the dough

Cybersecurity isn’t exactly new, but it’s becoming one of the hottest areas on the startup scene.

With global malware attacks like WannaCry garnering widespread attention and press coverage, and companies and consumers growing increasingly worried about how security threats are rapidly evolving and diversifying, investors and entrepreneurs alike are seeing big opportunities.

“Security is a space where you see a lot of startups,” said Sarah Guo, an investor at Greylock Partners. “Everything is increasingly internet connected and if it’s internet connected, it’s vulnerable. There’s a lot of new opportunity, and I personally believe the market will grow for a long time.”

Last year, investors put $3.5 billion into cybersecurity companies via more than 400 deals, according to CB Insights. And those numbers may well go up this year — the first quarter of 2017 set a five-year record for deals in the private security space.

What they’re seeing is a market that’s already huge, but is growing steadily. Companies will spend some $81.7 billion globally on security hardware, software and services, up 8.2% from last year, IDC projects. The tech research firm expects the market to continue to grow at a nearly 9% annual clip through 2020.

Protecting fish tanks — and against phishing
Among the new generation of cybersecurity companies is PhishMe, a startup that focuses on combatting phishing attacks. The startup has developed a threat management platform that makes it easier for employees to report suspicious email. It expects to see $70 million in revenues this year, said Rohyt Belani, the company’s CEO.

“Recently, we’ve had some chief security officers come to us saying, ‘My board of directors are asking me what are we doing to protect against phishing attacks.’ It’s turned into a board issue at Fortune 500 companies,” Belani said. “Every high profile breach that you see these days has started with a phishing email. From our standpoint that’s been great tailwinds.”

There’s no doubt that phishing — sending fraudulent emails in order to get information like passwords and credit card numbers — is a major concern. But it’s only one among many being targeted by cybersecurity startups.

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