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‘There’s A Lot Of Noise’ — VCs Trying To Find Clarity In Cluttered Cyber AI Landscape

May 15, 2024 - news.crunchbase.com
The annual RSA Conference in San Francisco revealed that investors in cybersecurity startups are seeking clarity amidst the noise surrounding AI. While many startups are pitching AI-based or AI-secured solutions, investors are taking their time to invest, with some expressing skepticism about the actual AI capabilities of these startups. However, funding for AI-related cybersecurity startups has rebounded this year, with $263 million invested in Q1, compared to $103 million in Q4 of last year. The largest deal in Q1 was a $60 million Series E raise by BigID.

Other highlights from the RSA Conference include the opening news of cloud security startup Wiz securing a $1 billion round at a $12 billion valuation. There is also growing interest in startups focusing on disinformation, particularly in the context of national elections. Investors are also keeping an eye on the strengthening M&A market, with expectations of increased activity in Q4. Private equity has already been active this year, with Thoma Bravo's recent acquisition of Darktrace for $5.32 billion.

Key takeaways:

  • Investors at the annual RSA Conference expressed a desire for clarity amidst the 'noise' surrounding AI in cybersecurity startups, with many taking their time to invest.
  • Funding for AI-related cybersecurity startups has increased in 2021, with $263 million invested in Q1 compared to $103 million in Q4 of 2020.
  • Startups focusing on disinformation are receiving interest, particularly those that can analyze data across multiple platforms like the dark web and social media.
  • The M&A market for cyber startups is slowly strengthening, with expectations of increased activity in Q4.
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