Investors have showered funding dollars on cybersecurity startups. The space is widely seen as being overfunded, but there are some good reasons for that.
NEA’s Ravi Viswanathan, on stage with Patricia Kemp of Oak HC/FT and Lauren Kolodny of Aspect Ventures at CB Insights’ Future of Fintech Conference, talked about why cybersecurity has received so much funding:
“Cybersecurity is a highly acquisitive space and you can take companies public,” said Viswanathan. “The market embraces successful companies.”
That’s a recipe to draw hungry companies into almost any space, even an already-crowded one like cybersecurity. So does that make trying to get into this market a lost cause? Maybe not. Viswanathan continued:
“I think there’s pocket where the product-market fit [is not absolute] … there [are] still white spaces you can go after … We need a few years to see [the market] settle out. There [are] probably going to be a lot of deaths in that space.”
Kolodny of Aspect Ventures spoke to changes she sees in the space:
“I think what’s interesting is that you see cybersecurity moving away from the era of building walls and looking for vulnerabilities and really moving towards incident response and mitigation. Because the assumption now is there is a breach.”
Koldony spoke as though these breaches were something that cybersecurity companies could consider a foregone conclusion, hence the new focus on response and mitigation. She did go on, however, to say that there were also opportunities for building the next generation of firewalls for distributed networks.
The rise of companies with remote offices and workers (some even bringing their own devices to work) creates a need for a way to keep all these people, their machines, and their data secure, she added.