29 Jun 2021
Posted in Business Fundamentals
COVID-hit 2020 failed to attract big-ticket VC funding deals in cybersecurity space, finds GlobalData
Big-ticket venture capital (VC) deals were non-existent in the cybersecurity space during the COVID-hit 2020. Low-value deals (where the investment was less than or equal to $10m) also took a hit, but still accounted for the majority of global investment volume, according to GlobalData, a leading data and analytics company.
An analysis of GlobalData’s Financial Deals Database revealed that a total of 513 VC funding deals (with disclosed funding value) were announced in the cybersecurity space during 2020. This was a decline of 18.8% over 632 VC funding deals announced during 2019.
Low-value VC funding deals volume also shrank as overall VC funding activity in the cybersecurity space declined during 2020 compared to 2019. The share of low-value deals as a proportion of total deal volume also contracted, but still accounted for more than 50% of the total deal volume.
The number of low-value deals in the cybersecurity space declined by 28% from 397 in 2019 to 286 in 2020, and the corresponding share as a proportion of the total deal volume also shrank from 62.8% in 2019 to 55.8% in 2020.
Aurojyoti Bose, Lead Analyst at GlobalData, comments: “The global pandemic has impacted funding activity in the cybersecurity space. However, it appears to be a short-term effect and considering the online transition of businesses, the relevance of cybersecurity is expected to increase and deal-making sentiments in the space is also likely to improve.”
There were no billion-dollar deals announced in 2020, while 2019 saw the announcement of one deal valued more than US$1bn. Moreover, 2020 even failed to attract any US$500m+ deals, while 2019 witnessed the announcement of three such deals.