Cybersecurity

Move fast and patch things: why investors are throwing money at digital defenders

Last updated: 14 Apr 2022

Market 101

The “fourth industrial revolution” is one of those buzz terms that everyone loves to throw around. But revolutions can get real messy, real fast. Technologies like cloud computing and the Internet of Things are intrinsically vulnerable to cyberattacks. The rise in attacks during the pandemic — such as ransomware hits that crippled Irish hospitals and a fuel pipeline in the US last year — gave an unpleasant taste of what’s to come, unless companies and governments get serious.

On the upside, as the targets for these attacks grows, so does the opportunity for startups fighting them. Most of these digital defenders hope to make it as specialists for particular capabilities and user needs, whether they’re focusing on sectors like IoT and cloud or services like authentication or employee training. At least for now, there seems to be enough room for everybody who’s working to keep this revolution from turning into a nightmare.

Early stage market map

Early stage market map

Key facts

€5tn

estimated cybercrime damages globally in 20211

238%

increase in cyberattacks globally between February and April 20202

80%

proportion of successful breaches attributable to “zero-day attacks” that exploit systems’ previously unknown security flaws3

Startups tracked by Sifted

Sifted take

With demand for digital defenders only going in one direction, startups have been able to scale quickly as security-spooked companies seek solutions from niche startups and established providers alike. In the longer term, however, clients may increasingly look for complementary software from the same provider — so look out for greater integration and consolidation.

Rising stars

Europe's leading pre-Series A startups (all published data verified) We identify companies as ‘rising stars’ using a number of criteria including founder backgrounds, investor track record, funding and valuation, and growth signals

AppSec Phoenix

Network & cloud security

Total funding

€640k

London, United Kingdom
2020

Provides a platform that helps companies identify and prioritise their vulnerabilities. Founder Francesco Cipollone previously worked in cybersecurity at organisations like Amazon and HSBC.

Round

Angel

Valuation

€18m


Date

2021

Size

€640k

Total funding

€11m

London, United Kingdom
2016

Harnesses quantum physics to produce encryption codes for microchips that can be used to secure IoT devices. The startup is backed by the likes of Kima Ventures and Entrepreneur First.

Round

Seed

Valuation

€17.5m


Date

2021

Size

€3.7m

CrowdSec

Threat detection

Total funding

€7.4m

Paris, France
2019

Backed by Breega, CrowdSec is able to mount a coordinated defence against attacks through open-source software that notifies everyone in its user community — essentially applying the same logic used by hackers in reverse.

Round

Seed

Valuation

€25m


Date

2021

Size

€4m

Early stage startups to watch

AppSec Phoenix

London, United Kingdom
2020
Angel

640k

640k

18m

Awen Collective

Caerphilly, United Kingdom
2017
Seed

1.5m

685k

3.7m

C2 Cyber

London, United Kingdom
2015
Pre-seed

1.4m

1.4m

1.4m

Croowly

Alcorcon, Spain
2019
Seed

200k

200k

200k

CrowdSec

France
2019
Seed

7.4m

4m

25m

Crypto Quantique

London, United Kingdom
2016
Seed

11m

3.7m

17.5m

Cyberangels

Milan, Italy
2020
Pre-seed

206k

206k

3.5m

Cyscale

Cluj-Napoca, Romania
2019
Pre-seed

500k

350k

2.4m

Cyttraction

Cologne, Germany
2020
Bootstrapped

-

-

-

Edgeless Systems

Bochum, Germany
2020
Pre-seed

1.4m

1.4m

-

Intruder

London, United Kingdom
2015
Seed

1m

720k

7m

Ironchip

Barakaldo, Spain
2017
Seed

500k

500k

2.5m

Kymatio

Madrid, Spain
2017
Pre-seed

1.2m

720k

2.5m

Lupovis.io

Glasgow, United Kingdom
2021
Pre-seed

700k

700k

3.5m

Seedata.io

London, United Kingdom
2021
Pre-seed

900k

760k

6.1m

Europe’s success stories

Who early stage startups are up against

(Pre-)Seed

SeriesA

SeriesB

SeriesC

SeriesD+

IPO/Exit

→ Sells network security products to 6,000 customers

→ Market cap of €3.5bn (IPO’d 2021)

(Pre-)Seed

SeriesA

SeriesB

SeriesC

SeriesD+

IPO/Exit

→ Targets the human aspect of cybersecurity by applying machine learning to email data and automatically flagging security risks

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