US Cyber Security start-ups struggling to fulfill their early promises

1 month ago Rajeev K Sharma 0

Cyber attacks these days are very common and highly challengeable for the Cyber Security start-ups as per US Cyber Security Start-Ups and many of these start-ups are struggling to fulfill their early promises.

Most of the cases the security products and systems developed by these start-ups are taken by advance hackers or in other words, Hackers are more advanced than these Cyber Security Start-ups all over the world.

US Cyber Security start-ups struggling to fulfill their early promises US Cyber Security start-ups struggling to fulfill their early promises


According to David Cowan, the partner at Bessemer Venture Partners a venture firm investing in Cyber Security start-ups ” I had never seen such a fast-growing sector & many startups on losing sides too”. Only some startups manage to stand them in the stock market in recent years. The number of these Start-ups become corporate “zombies” but with very little prospects fetching a good price in an Initial Public Offering (IPO). The initial investors of these start-ups left without profits.

The scenario is completely changing because some companies are consolidating their security work to “lower-cost bug bounty firms” which again contacting to freelance researchers to help & identify the security weakness. As per Dave DeWalt, the former CEO of FireEye that ” we are in such a situation where there are just too many vendors and only few can be sustained,”

Eric McAlpine, Co-Founder of Momentum Cyber an advisory firm associated with Cybersecurity start-ups estimates 300 cybersecurity start-ups launch every year and keeping a track of 2500 cybersecurity start-ups till today. Some of these start-ups are pulling off their IPO’s.

ForeScout Technologies in the US is a provider of software that helps companies to keep their employes device secure was the only cybersecurity company to go public last year. As per the reports, ForeScout raised US$116 million in an IPO which valued the company around US$800 million and thus making him down from its US$1 billion market valuation in an earlier year.

However, in a statement, Yoav Leitersdorf, founder of investment firm YL Ventures investor in Hexadite states that “Start-ups that are likely to reach between US$100 million to US$300 million are still offering excellent opportunities for an exit for their investors”. Hexadite is a security incident investigation company that announced a sale to Microsoft last year.

Carbon Black one the largest start-ups in the US formerly known as Bit9 delayed its IPO’s. The start-up was founded in the year 2002 by the former US government cybersecurity experts. Carbon Black is a pioneer in developing tools that detect and then responds towards the cyber threats targeting corporates. Sources close to Carbon Black said it is now hoping to go public this year, and the company delayed its IPO’s for integrating a US$100 million acquisition of a company called “Confer“. However, Patrick Morley CEO Carbon Black denied commenting on this acquisition plan.