Jan 30, 2020

Cybersecurity sector sees record venture capital investment in 2019

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Adapted from PitchBook; Chart: Axios Visuals

The cybersecurity sector is attracting "unprecedented levels of VC dealmaking," according to the year-end Venture Monitor report by the National Venture Capital Association and PitchBook.

Why it matters: Technology is now not just a sector of the economy, it is the primary driver of the economy. And the more wireless networks, software applications, cloud data centers and internet-connected devices we use, the more security vulnerabilities we'll have to protect against. 

The big picture: That's a big opportunity for smart investors. Virtually every company is willing to pay big bucks for security solutions and protection. And the threats are morphing all the time. 

Details: Cybersecurity capital investment hit a new record in 2019. 

  • The share of late-stage deals fell slightly due to strong interest in early-stage deals, per the data. 
  • The average deal size in 2019 was $17.3 million, a slight uptick from 2018. 
  • But average valuations fell to $136.8 million, a correction after a significant uptick from 2017–2018. 

Go deeper: Huawei's trial by "what if"

Go deeper

Fintech investors avoided early-stage companies in 2019

Reproduced from CB Insights; Chart: Axios Visuals

Fintech investment fell in 2019, as the number of deals and the total amount of money invested both declined significantly from 2018's record pace.

The big picture: The biggest decline was in early-stage investing, which saw the lowest number of deals in five years, according to data from CB Insights. Later stage series B+ companies, on the other hand, saw funding rise to five-year highs.

Health care VCs haven't made plans for a Bernie Sanders win

Illustration: Sarah Grillo/Axios

Bernie Sanders still may eke out a win in Iowa, and is the consensus front-runner in New Hampshire. But most venture capitalists investing in America's health care industry — the primary target of Bernie's ire — have shoved their heads so deep in the sand that they've found water.

Why it matters: At some point, it could become a failure of fiduciary duty.

Venture capital has no guesses as to what 2020 has in store

Illustration by Rebecca Zisser/Axios

Over the past 48 hours at the Upfront Summit, I've met with at least 50 venture capitalists and nearly as many limited partners in venture capital funds, representing varying geographies, experiences, and specialties.

My goal in such settings is to suss out a consensus trend or sentiment. The same thing that keeps arising in varied conversation, unprompted. For the first time I can remember, there wasn't one.