Cybersecurity Market Review

Transcription

1 Cybersecurity
Market Review
Q4 2015 | Year End
Advisors & Dealmakers In Cybersecurity.
Momentum Partners, LLC
•  Advise. Network. Invest.
Momentum Partners
Advisors & Dealmakers In Cybersecurity.
Why Momentum Partners?
Momentum’s Cybersecurity Team
Corporate Development
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Advisor to CEOs, Founders & Boards
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Keith Skirbe
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Cybersecurity  Enterprise IT  Cloud & SaaS  Mobile
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Mergers & Acquisitions
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VC & Private Equity
Capital Raising*
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150+ Deals
$150+ Billion
Dealmakers in Security & Enterprise IT
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Industry Research
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Active Dialogue & Strong Track Record With Cybersecurity Acquirers & Investors Including…
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6 , 3 0 7 CISOs
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0 , 3 5 9 Europe
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East
West
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*** AS OF JANUARY 20, 2016 ***
3 CYBERscape 2.0: Our Landscape Taxonomy
The Security Sector Is Dynamic And Vast. We Are Ceaseless & Vigilant In Our Coverage.
Infrastructure Security
Network Firewall
Network Monitoring
Intrusion Prevention Systems
Unified Threat Management
IoT Security
Security Operations & Incident Response
Endpoint Security
Application Security
Endpoint Protection & Anti-Virus
WAF & Application Security
Endpoint Detection & Response
Vulnerability Assessment
Messaging Security
Web Security
Threat Intelligence
Mobile Security
Data Security
SIEM
Cloud Security
Security Incident Response
Transaction Security
Specialized Threat Analysis & Protection
Risk & Compliance
Source: Momentum Partners.
4 Identity & Access Management
Q4 Market Update And Observations
What A Year Of Strategic Activity It Was In 2015. Q4 Was Another Very Busy Quarter For Strategic Moves.
Exits: M&A &
IPO Activity
Investment
Activity
Valuations
Industry
Observations
§  The cybersecurity M&A market continued at a record pace in 2015, totaling 142 transactions,
representing a 61% increase over the five-year low-point in 2012
§  There were several large notable M&A transactions during Q4 – Elastica ($280M), Lancope
($453M), TippingPoint ($300M) and Vormetric ($400M)
§  Mimecast priced during Q4 ($10/share); Dell Secureworks and Veracode remain on file and
Tenable Network Security and Tanium are on IPO watch
§  Q4 saw a surge in large rounds yet again with eight companies raising $50M+, of which three
raised at least $75M – Forescout ($75M), Tenable Network ($250M), Code42 ($86M)
§  2016 could be a golden era of cybersecurity investing with ample capital and an increasing threat
landscape; however, some are predicting a measured slow-down leaving a slew of Seed/Series A
funded companies without a Series B sponsor…and in desperate need of a ‘home’
§  There were some notable declines during Q4 – our High Growth Security comps were -7% during
Q4 and +18% YTD while our Low Growth Security comps were +6% during Q4 and -9% YTD,
relative to the NASDAQ which was +8% during Q4 and +6% YTD
§  Rapid7, Sophos and Mimecast were trading -5%, +9%, and -4% relative to their IPO price,
respectively, at the end of Q4
§  Threat Intelligence in the spotlight during the quarter – M&A and significant capital raise activity
§  Spending on cybersecurity totaled an estimated $77 Billion for 2015 and projected to reach $170
Billion in 2020, but is it sufficient? Organizations spent another $491 Billion recovering from
attacks in 2015 – 6x the spend to thwart them
§  Predictions abound for 2016 – buzz words too – IoT, ransomeware, hacktivism, autonomic
defense, user behavior monitoring, machine learning, adversary intelligence, cyberwar (?!)
5 Top 5 Movers in Q4
35%
33%
27%
36%
20%
Strategic Activity In 2015
M&A & Venture Capital Remained Strong While IPOs Were Not Immune To Market & Economic Pressures.
12/15:$35M/1.9x
Selected Acquisition Activity
Selected VC Activity
Equity
(Date: Implied Enterprise Value / LTM Rev Multiple)
(Date: $ Raised / Pre-$ Valuation / Funding Stage)
(Date: $ Raised)
11/15:$150M/NA
11/15:$280M/NA
12/15:$50M / NA / C
10/15:$453M/NA
12/15:$27M / $43M / B
11/15:$20M / $60M / B
11/15: IPO: $78M
10/15:$300M/1.8x
10/15:$65M/3.2x
10/15:$400M/7.5x
10/15:$71M/NA
10/15:$116M/10.3x
11/15:$250M / NA / B
10/15:$33M / NA / A
10/15:$15M / $55M / B
9/15:$290M/NA
9/15:$425M/2.0x
7/15:$190M/NA
9/15:$75M / $1.1B / F
9/15:$75M / $275M / D
8/15:$52M / $380M / E
9/12: Series C: $62M
1/10: Series B: $21M
12/08: Series A: $8M
$91M
7/15: IPO: $103M
6/15:$635M/NA
6/15:$22M/NA
6/15:$20M/NA
5/15:$60M/NA
7/15:$42M / $249M / C
7/15:$100M / $567M / C
7/15:$18M / NA / B
4/15:$200M/3.3x
4/15:$1.9B/NA
4/15:$786M/3.6x
4/15:$80M/NA
6/15:$30M / $122M / C
4/15:$100M / $900M / C
3/15:$11M / NA / A
12/14: Series D: $30M
11/11: Series C: $50M
2/10: Series B: $2M
9/08: Series A: $7M
$89M
6/15: IPO: $553M
5/02: Minority: $60M
9/98: Venture: $4M
3/15:$2.4B/NA
3/15:$43M/NA
3/15:$32M/NA
1/15:$85M/NA
2/15:$35M / $185M / B
Source: Capital IQ, 451 Group, Crunchbase, TechCrunch. Momentum Partners maintains a proprietary Security M&A deal database.
6 2/15:$15M / NA / B
1/15:$40M / NA / C
$64M
Notable M&A Transactions
Cybersecurity Continued To Remain A Key Strategic Priority For IT & Non-IT Buyers.
Acquires
Ent. Value / Rev: NA
Date: 10/27/15
Ent. Value / EBITDA: NA
Ent. Value: $453M
Amount Raised: $24.6M
Acquires
Ent. Value / Rev: 7.5x
Date: 10/19/15
Ent. Value: $400M
§  Founded in 2000, Lancope focuses on
behaviour analytics, threat visibility and
security intelligence to detect malicious activity
on corporate networks
§  Lancope highly complements Cisco’s
cybersecurity strategy “highlighting the network
as an infosec sensor and enforcer”, and is
already integrated with Cisco tech for network
profiling and enforcement
§  Marked Cisco’s fourth security deal in previous
12 months – OpenDNS ($635M), Neohapsis
and Portcullis
Acquires
§  Founded in 2012 and launched in 2014,
Elastica’s CloudSOC platform is rated for its
ability to provide visibility, threat detection and
prevention, data governance and post incident
analysis to cloud applications. Capabilities are
delivered via CASB gateway and API controls
§  This marks the second major purchase in the
CASB market by Blue Coat, having acquired
PerspecSys in July 2015
Date: 11/9/15
Ent. Value / Rev: NA
Ent. Value: $280M
§  Founded in 2001, Vormetric provides a Data
Security Platform that protects any file, any
database and any application’s data –
anywhere it resides (physical, big data and
cloud environments)
§  Vormetric had 200 employees and over 1,500
enterprise clients, including 17 of the top 30
U.S. companies
§  Acquisition accelerates Thales’ cybersecurity
initiatives; Vormetric will be integrated into
Thales e-Security which already protects
network data for 19 of 20 largest world banks
Acquires
Ent. Value / Rev: 10.3x
Date: 10/09/15
Ent. Value: $116M
Amount Raised: Self-Funded
Source: Capital IQ, PitchBook Data, CrunchBase.
7 §  Blue Coat has invested $500M+ in organic and
inorganic development in recent years to expand
its cloud security capabilities
§  Founded in 2008, LastPass is a provider of
password management software with 7 million
users across both the consumer and enterprise
market
§  LastPass will better position LogMeIn in the
identity and access management market,
which represents one of LogMeIn’s top three
strategic growth initiatives
§  As part of the transaction, another $15M is
available in contingent payments if LastPass
meets certain milestone and retention targets
over the two years post-acquisition
A Closer Look at Recent Cybersecurity Exits
Breaking Down The Cybersecurity Exits In 2014 And 2015.
Last Round Prior to Exit
Time to Exit
Observations
10%
15% 13%
Seed
< 2 years
Series A
14%
34%
25%
Series B
45%
2 to 5 years
19%
5 to 10 years
Series C
§  Just under a third of companies exited prior to
turning 5 years old
-  ‘Quick flips’ are not the norm
Note: Excludes self-funded companies.
Total $ Raised Prior to Exit
Deal Size
§  Just over half of cybersecurity exits are $50M or
below
6%
12%
$1M - $10M
46%
26%
$10M - $20M
$0 - $50M
25%
$20M - $50M
15%
Note: Excludes companies that raised <$1M.
$50M+
-  Many founders face the dilemma: sell now or
raise more money and raise the bar
10+ years
26%
Series D+
§  An active area of ‘pursuit’ for Corporate
Development teams is finding Series A backed
companies at rational valuations
$50M - $100M
53%
-  The ‘sweet spot’ for cybersecurity exits is
$25M - $100M (roughly two-thirds of all
cybersecurity exits)
$100M - $500M
16%
$500M+
Note: Excludes undisclosed deal values (typically < $50M).
8 §  Just under half of venture backed cybersecurity
companies raised <$10M prior to their exit
Notable VC Financings
Investors Not Afraid To Deploy Significant Capital For Well-Established Or Game Changing Companies.
Raises $250.0 Million
Date: 11/10/15
Series B
Total Amount Raised: $300.7M
Date: 10/6/15
Series B
§  The raise eclipsed the previous record for a
cyber funding round held by Airwatch who
raised $225M in 2013. Incidentally, Insight
and Accel were also part of that deal
§  Founded in 2002, Tenable’s flagship products
include SecurityCenter Continuous View,
which provides an integrated view of network
health, and Nessus, software used for detecting
and assessing network data
§  Tenable added 200 employees in 2015 and
said billings grew 50%+ last year, with a
current run rate exceeding $100M
Date: 10/25/15
Series A
§  Founded in 2001, Code42 is an enterprise
SaaS provider of endpoint data protection and
security to more than 37,000 organizations. It
is best known for CrashPlan, a solution that
backs up all distributed end user data on a
single, secure platform
§  Since pivoting to the enterprise Code42 has
been experiencing strong growth – 100% yearover-year
§  Proceeds from the financing will be utilized to
expand Code42’s data analysis capabilities
Raises $35.0M
Date: 11/3/15
Series A
9 §  IronNet CyberSecurity was founded in 2014 by
Former U.S. National Security Agency Director
Keith Alexander along with former top officials
in U.S. Department of Defense, the National
Counterterrorism Center and the Defense
Advanced Research Projects Agency
§  IronNet’s technology detects and mitigates
anomalous activity in a company’s cyber
infrastructure using advanced behavioural
models and analytics
§  The funding will help accelerate growth and
scale the launch of the IronNet product line
§  iBoss was founded in 2005 and brought its first
product to market in 2009. iBoss’ technologies
work by “actively monitoring all network
traffic” which allows it to “prevent large-scale
data breaches caused by malware that has
made its way onto the network and is posed to
steal data”
§  iBoss’ clients include Xerox, Sears, Urban
Outfitters, and the US Department of the
Interior
§  The post-money valuation on the round was
north of $500M
To Series B or Not to Series B? That is the Question
Those Companies That Cross The Chasm Have A Finite Set Of Experienced Investors To Lead Their Series B Round.
The Funding Snapshot: Series A & B
Recent Series B Lead Investors In Cybersecurity
B A ($531M) ($425M) ($622M) ($1.0B) ($375M) ($475M) ($1.6B) ($300M) ($1.1B) ($520M) ($410M) ($4.7B) ($225M) ($525M) (N/A) ($50M) (N/A) ($400M) ($225M) ($450M) ($100M) ($70M) ($260M) ($400M) (N/A) ($450M) ($250M) ($702M) ($2.8B) ($236M) ($202M) ($282M) ($1.8B) (N/A) (N/A) ($650M) ($675M) ($1.4B) ($300M) ($450M) Note: Last fund size in parentheses. All firms above led a Series B round in the past two years. Some notable
exclusions are Trident Cyber, A16Z, Redpoint, and Intel Capital (all of which can/do lead Series B rounds). Note: Companies shown raised their A or B round in 2015. 10 Security IPO Insights
Before And After FireEye’s IPO: A Stark Contrast Of Post-IPO Performance & Corresponding Valuation Impact.
Implied Multiple On The Day of Pricing For Each Security Sector IPO
(Multiple: EV / LTM Revenue)
20.5x
13.4x
13.0x
4.4x
3.9x
IPO Timing
4.3x
4.0x
5.3x
2012
4.1x
5.7x
2013
4.6x
5.3x
6.7x
4.0x
4.0x
2015
2014
Stock
Performance
(since IPO)
10%*
185% *
5%*
333% *
255% *
133% *
17%*
24%*
44%*
60%*
28%*
190% *
4%*
11%*
23%*
EV / LTM Rev
(Current)
2.5x
9.0x
1.7x
8.9x
12.2x
5.0x
2.8x
3.4x
1.3x
1.3x
1.9x
8.4x
4.0x
4.7x
3.5x
Total $ Raised
$128M
$230M
$120M
$82M
$260M
$91M
$128M
$304M
$64M
$100M
$75M
$86M
$553M
$103M
$78M
Source: Capital IQ.
11 Median: 4.6x
Momentum’s Fourth Quarter Watch List
Selected Private Companies With “Momentum” That We Are Tracking.
Company
Commentary
Raised: $9.2M
HQ: Woodside, NY
§  Phantom Cyber truly automates enterprise security operations. Phantom Cyber arms
security operations with the automation and orchestration solutions that ready them to
defend their company’s business
§  “Phantom is a force-multiplier for our security team,” said Jay Leek, Chief Information
Security Officer at Blackstone
§  Leadership: Oliver Friedrichs (CEO) and Sourabh Satish (CTO)
Raised: $37.2M
HQ: Denver, CO
§  ProtectWise is disrupting the network security industry with its Cloud Network DVR, a
virtual camera in the cloud that records everything on the network
§  “We are driving a shift away from the old school, prevention-centric, endpoint approach to
network security to a modern, integrated platform approach that is based on vastly
improved detection, visibility and response,” said Scott Chasin, CEO
§  Leadership: Scott Chasin (CEO) and Gene Stevens (CTO)
Raised: $12.2M
HQ: Sterling, VA
§  ThreatQuotient is the only Threat Intelligence Platform (TIP) that centrally manages and
correlates unlimited external sources with all internal security and analytics solutions for
contextual, operationalized intelligence in a single pane of glass
§  Revolutionizing cyber defense capabilities by building an analyst-driven application that
helps organizations manage threat intelligence to defend against cyber attacks
§  Leadership: John Czupak (CEO), Wayne Chiang (Chief Architect), & Ryan Trost (CTO)
Raised: $16M
HQ: San Mateo, CA
§  Fortscale turns the tables on insider threats by delivering the industry’s most precise,
scalable and extendible user behavior analytics solution
§  Using machine learning, Fortscale first detects unusual user behavior, then ranks the results
in order of their anomalousness, all with continuous tuning to optimize future results in
order to provide unmatched threat detection accuracy
§  Recent investment by CME Ventures (CME Group) and UST Global for expansion
§  Leadership: Idan Tendler (CEO) and Dr. Yona Hollander (COO)
Raised: $56M
HQ: Sunnyvale, CA
§  RedSeal provides a cybersecurity analytics solution to Global 2000 organizations that
helps maximize their digital resilience. RedSeal’s advanced analytics engine creates
functioning network models, tests networks to identify security risks, prioritizes needed
actions, and provides critical information to quickly remediate issues
§  Recently named to Deloitte’s Technology Fast 500, growing 137% year-over-year
§  Leadership: Ray Rothrock (Chairman & CEO)
Source: Momentum Partners, PitchBook Data, CrunchBase, Company press releases.
Company
Commentary
Raised: $82.5M
HQ: Arlington, VA
§  LookingGlass is the leader in threat intelligence driven security and dynamic threat
defense generating, sourcing, and delivering the most extensive sources of threat data
available out of the box through its ScoutVision and Virus Tracker products
§  Recently acquired Cyveillance, a leader in open-source threat intelligence (OSINT)
§  Other acquisitions include CloudShield and Kleissner and Associates
§  Leadership: Chris Coleman (CEO) and Randy Brumfield (COO)
Raised: $26M
HQ: London / SF
§  Wandera provides a cloud-based Secure Mobile Gateway to secure mobile devices from
cyber criminals while at the same time providing mobile data optimization and real-time
intelligence, which provides granular control and visibility over data usage and generates
immediate ROI
§  Partner ecosystem includes AT&T, BT & Samsung as well MDM players
§  Leadership: Eldar Tuvey (CEO) and Roy Tuvey (President)
Raised: $25.5M
HQ: Redwood City, CA
§  Area 1 Security, a stealth cybersecurity company that is dedicated to eliminating targeted
phishing and malicious social engineering attacks through a globally-distributed sensor
network, taking a data-driven approach to provide timely and accurate visibility into the
delivery mechanisms attackers are using
§  Founded by security and data analytics experts from NSA, MIT and Disney
§  Leadership: Oren Falkowitz (CEO) and Blake Darche (Chief Security Officer)
§  ForeScout offers the unique ability to see devices the instant they connect to the network,
control them and orchestrate information sharing and operation among disparate security
tools without requiring software agents or previous device knowledge
§  ForeScout’s shares contextual data it discovers about endpoints with other security vendors
through its ControlFabricArchitecture making existing tools smarter
12 Raised: $186.4M
HQ: Campbell, CA
§  Named 1 of 20 fastest growing security companies in 2015 (Silicon Review)
§  Leadership: Michael DeCesare (CEO), Oded Comay (CTO)
Raised: $3M
HQ: San Francisco, CA
§  Peerlyst is an on-line network of security professionals, including some of the top CISOs,
effectively helping security professionals succeed through sharing
§  “There aren’t a lot of places for security pros to collaborate — they can read tech
magazines and content but there’s not one place for them to do all that and get
information on products,” says Founder Limor Elbaz
§  Leadership: Limor Elbaz (CEO)
Momentum’s Watch List: Q2 & Q3 2015
A Look Back At Those Companies With “Momentum” Spotlighted in The Previous Two Quarters.
Q3 2015
Q2 2014
Raised Series A (10/25/15): $32.5M
Acquired By (11/9/15):
13 Sector Watch: The Threat Intelligence Arms Race
Strategic Activity Abound As Acquirors & Investors Seek The Holy Grail – ‘A Single Pane Of Glass’.
Notable Strategic Activity
Founded: 2006
HQ: Baltimore, MD
Total Raised: $82M
12/11/15
§ 
§ 
Series C
$50M
Simultaneous with the capital raise announced the
acquisition of Cyveillance, a leader in OSINT, for
$35M
Founded: 2013
HQ: Baltimore, MD
Total Raised: $40M
12/03/15
§ 
Series B
Target
$27M
Other investors included Avi Rubin, CS professor
at Johns Hopkins, Lane Bess, former CEO of Palo
Alto Networks and Tim Eades, CEO of vArmour
2015 was a record year – raised additional $20M
and acquired Kleissner & Assoc. & CloudShield
Founded: 2013
HQ: Sterling, VA
Total Raised: $12M
12/02/15
§ 
Other Strategic Activity
Series A
$10M
Simultaneous with the capital raise announced the
appointment of John Czupak as CEO on 10/20/15.
Previously, Czupak spent 12+ years in senior roles
at Sourcefire
Founded: 2011
HQ: Arlington, VA
Total Raised: $20M
12/01/15
§ 
Series B
$16M
Investment driven by SAP National Security
Services (NS2) is a precursor to the development
of a joint product built on SAP HANA to be added
to ThreatConnect’s portfolio in 2016
Other
Notables
14 Buyer
Metrics
Company
Metrics
12/15: $35M/NA
9/15: $11M/Series A
10/15: NA/NA
7/15: $100M/Series C
7/15: NA/NA
4/15: $12M/Series D
6/15:$635M/NA
3/15: $20M/Series B
5/15: NA/NA
2/15: $5M/Series A
3/15: $32M/NA
2/15: $8M/Series A
3/15: $5M/NA
12/14: $22M/Series B
10/14: NA/NA
12/14: $30M/Series C
5/14: NA/NA
5/14: $25M/Series B
1/14: $827M/8.1x
4/14: $8M/Series A
5/09: $40M/4.0x
3/14: $20M/Series E
High Profile Breaches In The Spotlight For A Second Year
The World’s Largest Data Breaches in 2014 & 2015. Is The Spend To Prevent Them Sufficient?
By The Numbers…
Australian
Immigration
Department
Adult Friend
Finder
Carefirst
AshleyMadison.com
Experian /
T-Mobile
British
Airways
US Office of
Personnel
Management
Hacking
Team
CarPhone
Warehouse
IRS
Securus
Technologies
MSpy
Premera
Anthem
80,000,000
Community
Health
Services
Home Depot
JP Morgan
Chase
56,000,000
Dominios
Pizzas (France)
AOL
2,400,00
0
Ebay
145,000,000
Advocate
Medical
Group
Korea Credit
Bureau
Target
Mozilla
MacRumuors.com
US Office of
Personnel
Management
(2nd Breach)
Source: 2014 Mandiant Report
Uber
could cost the global economy
Twitch.tv
70,000,000
UPS
NASDAQ
New York
Taxis
ssndob.ms
Neiman
Marcus
in lost productivity & growth
Source: 2014 Mandiant Report
…more than…
Japan
Airlines
Living
Social
…CYBER ATTACKS
$3 Trillion
76,000,000
European
Central Bank
D&B,
Altegrity
Staples
Sony Pictures
go undetected for
229 Days
TalkTalk
Slack
…ATTACKERS
140 Countries
have some level of cyber weapon
development program
Source: fortune.com
UbiSoft
…the average cost of a data breach
Global spend on Cybersecurity products reached $77 Billion in 2015 while organizations
spent another $491 Billion recovering from successful cyber attacks. Is the spend sufficient?
$3.5 Million
increased 15% over the past year
Source: 2014 study Phonemon institute
Source: Momentum Partners, http://www.informationisbeautiful.net/
visualizations/worlds-biggest-data-breaches-hacks/, Gartner, IDC.
15 What’s In Store For 2016?
After A Thrilling 2015…We Survey & Report The Key Predictions For Cybersecurity In 2016.
The Predictions…
…The Predictors
§  M&A: M&A will continue it’s vigorous pace into 2016, and may even pick up
§  PE/VC: A golden era in 2016 for cybersecurity investing; great companies and teams will
get the capital they deserve, albeit with some Series A ‘fallout’
§  Public Markets: equity markets will reward balanced and predictable growth +
profitability for cybersecurity companies who set and meet sound expectations; more
strong performing IPOs in 2016with a number of high caliber candidates
§  IoT: the internet of hackable things – a new frontier of data breaches on the horizon
§  Ransomeware: the year of online extortion – how much would you pay to regain access
to your computer? Your TV programming? Your fridge?!
§  Breaches & DOXing: 2015 was painful and the worst on record, but 2016 will be even
worse. Our data will continue to be weaponized and used against us
§  Hactivism: ‘greed is good’ according to Gordon Gekko, but not the only motivation of
hackers – hactivism on the rise.
§  Autonomic Defense: the continued threat intelligence data explosion combined with a
chronic shortage of threat analysts, demand increases for automated response
§  Machine Learning: goes mainstream for user behavior and anomaly detection
§  War?!: 2016 will see the world’s first openly declared cyberwar
16 M&A Activity in
Security
Strategic Moves For Competitive Advantage Accelerating
The Landscape Of Buyers For Cybersecurity Companies Has Expanded Over Time.
Notable Deals By Sector
Cybersecurity IT
IT
PE
Defense
Industrial
ISP
Defense
11/15:$280M/NA
11/15:$150M/NA
4/15:$1.9B/NA
10/15:$71M/NA
10/15:$453M/NA
7/15:$190M/NA
4/15:$80M/NA
Industrial
ISP
PE
12/14:$710M/6.0x
10/15:$9M/NA
8/15:NA/NA
7/14:NA/NA
7/15:NA/NA
4/15:$200M/3.3x
5/14:NA/NA
4/15:$786M/3.6x
3/15:$2.4B/NA
10/14:$233M/3.0x
9/12:$86M/7.1x
Most Active Acquirers
/ Source: Momentum Partners.
18 Security M&A Activity: Deal Volume and Exit Multiples
Security M&A Activity Remains Robust.
Security M&A Volume By Year (# Deals)
Median Security EV/Revenue Multiples
136
107
2010
101
2011
88
2012
142
5.5x
5.0x
100
2013
2014
2013
2015
§  Security M&A activity continued its record pace, totaling 142 transactions
2014
4.5x
2015
§  The median Security exit multiple in 2015 was 4.5x as valuations continued
in 2015, a 61% increase over the five-year low-point in 2012
to rationalize, having declined 18% since 2013
§  Some of the more active Security sectors in 2015 included cloud security,
identity & access management, data security, network security and threat
intelligence
Source: Momentum Partners, 451 Research.
19 Notable Security M&A Transactions
Security M&A Transactions With Disclosed Transaction Values.
Date
Target
Buyer
Enterprise Value ($M)
TTM Revenue ($M)
12/16/15
Evault
12/14/15
SurfRight
12/11/15
12/10/15
Carbonite
14.0
−
−
Sophos
31.8
−
−
Cyveillance
LookingGlass Cyber Solutions
35.0
18.0
1.9x
Trustev
TransUnion
44.0
−
−
11/24/15
Fox-IT Group
NCC Group
132.3
29.0
4.6x
11/17/15
Aura Information Security
Kordia Group Limited
6.5
−
−
11/09/15
Secure Islands
Microsoft
150.0
−
−
11/09/15
Elastica
Blue Coat Systems
280.0
−
−
11/02/15
Bloxx
Akamai
18.7
−
−
10/27/15
Lancope
Cisco
452.5
−
−
10/22/15
Cloudpath Networks
Ruckus Wireless
9.0
−
−
10/21/15
TippingPoint Technologies
Trend Micro
300.0
169.0
1.8x
10/19/15
Vormetric
Thales e-Security
400.0
53.5
7.5x
10/13/15
Logentries
Rapid7
71.1
−
−
10/09/15
LastPass
LogMeIn
115.7
11.2
10.3x
10/08/15
Daegis
Open Text
20.8
23.7
0.9x
10/07/15
Viewfinity
CyberArk
30.5
−
−
09/29/15
Intronis
Barracuda Networks
65.0
20.6
3.2x
09/24/15
Billguard
Prosper
30.0
−
−
09/22/15
Elitcore Technologies
Sterlite Technologies
27.6
22.3
1.2x
Source: Capital IQ, PitchBook Data.
20 EV / Revenue
Notable Security M&A Transactions
Date
Target
Buyer
TTM Revenue ($M)
EV / Revenue
09/08/15
Adallom
Microsoft
290.0
−
−
09/04/15
Good Technology
Blackberry
425.0
211.9
2.0x
08/25/15
Above Security
Hitachi Data Systems
08/19/15
EyeLock
VOXX International
08/06/15
Pawaa Software
Cisco
07/09/15
Caspida
06/30/15
OpenDNS
06/09/15
Reflexion Networks
06/08/15
IdMlogic
06/02/15
4.7
−
−
20.2
−
−
5.0
−
−
Splunk
190.0
−
−
Cisco Systems
635.0
−
−
Sophos
22.0
−
−
CA Technologies
20.0
−
−
nSense
F-Secure
19.6
7.8
2.5x
05/27/15
ShieldArc
Palo Alto Networks
18.0
−
−
05/06/15
Privax
AVG
60.0
−
−
04/28/15
Cervalis
CyrusOne
400.0
70.0
5.7x
04/21/15
Watchdox
Blackberry
70.0
−
−
04/20/15
Websense
Raytheon
1,900.0
−
−
04/14/15
Fedelis Cybersecurity Solutions
Marlin Equity Partners
200.0
60.0
3.3x
04/07/15
Trustwave
Singtel
785.7
216.0
3.6x
04/02/15
Lacoon Mobile Security
Check Point
80.0
−
−
03/24/15
Accumuli
NCC Group
69.1
28.6
2.4x
03/10/15
Blue Coat Systems
Bain Capital
2,400.0
−
−
Date
Target
Buyer
TTM Revenue ($M)
EV / Revenue
03/10/15
CyActive
Paypal
43.0
−
−
03/02/15
Emerging Threats
Proofpoint
32.3
−
−
03/02/15
Xerocole
Akamai
16.6
−
−
03/02/15
Cloudshield
Lookingglass Cyber Solutions
5.0
−
−
02/24/15
Optenet
Allot Communications
38.0
−
−
02/19/15
MegaPath Managed Services Business
Global Technology & Telecom
152.4
142.4
1.2x
01/14/15
IntellinX
Bottomline Technologies
84.9
−
−
12/09/14
Tripwire
Belden
710.0
118.5
6.0x
11/13/14
Aorato
Microsoft
200.0
−
−
11/05/14
Blackbird Technologies
Raytheon
420.0
−
−
10/31/14
WISeKey
Garnero Group
138.3
6.2
22.2x
10/21/14
Silversky Networks
BAE Systems
232.5
−
−
37.5
−
−
2,619.4
836.0
3.1x
10/20/14
RightSignature
Citrix Systems
10/13/14
Danaher (Textronix, Arbor, Fluke)
Netscout
10/01/14
MobileSpaces
Pulse Secure
100.0
−
−
09/15/14
Attachmate
Micro Focus
2,159.4
875.4
2.5x
09/11/14
Morvirtu
Blackberry
32.5
−
−
15.0
09/04/14
Meldium
LogMeIn
−
−
09/03/14
Location Labs
AVG Technologies
220.0
33.0
6.7x
09/02/14
BeyondTrust Software
Veritas Capital
310.0
70.5
4.4x
Date
Target
Buyer
09/02/14
SOFTPRO
Kofax
08/08/14
SafeNet
Gemalto
TTM Revenue ($M)
EV / Revenue
34.7
13.3
2.6x
890.0
454.8
2.0x
9.0
07/29/14
Secusmart
Blackberry
−
−
07/21/14
Retail Decisions
ACI Worldwide
205.0
−
−
07/07/14
CA Arcserve Data Protection Assets
Marlin Equity Partners
170.0
−
−
05/20/14
NetCitadel
Proofpoint
22.8
−
−
05/19/14
Divide
Google
120.0
−
−
05/06/14
nPulse Technologies
FireEye
67.1
−
−
04/24/14
DecTech Solutions
GB Group
28.9
9.8
3.0x
04/23/14
docTrackr
Intralinks
10.0
−
−
04/07/14
Metaforic
INSIDE Secure
17.4
−
−
03/31/14
Blancco Oy
Regenersis
70.3
17.1
4.1x
03/24/14
Cyvera
Palo Alto Networks
213.3
80.0
2.7x
02/23/14
Boxtone
Good Technology
360.0
20.9
17.2x
02/10/14
Cyberoam
Sophos
80.0
−
−
02/06/14
Skyfence
Imperva
65.0
−
−
02/06/14
Incapsula
Imperva
40.5
−
−
01/30/14
Tomium
Imperva
8.1
−
−
01/22/14
AirWatch
VMware
1,545.0
−
−
01/06/14
Morta Security
Palo Alto Networks
10.3
−
−
Date
Target
Buyer
01/02/14
MANDIANT
FireEye
826.5
102.0
8.1x
12/09/13
QUMAS
Accelrys
47.8
19.3
2.5x
12/03/13
Alaric
NCR
67.8
−
−
12/02/13
Prolexic
Akamai
402.6
−
−
10/01/13
41st Parameter
Experian
324.0
−
−
09/30/13
Sensory Networks
Intel
20.0
−
−
09/17/13
Versafe
F5 Networks
87.7
−
−
08/15/13
Trusteer
IBM
900.0
40.0
22.5x
08/09/13
Armorize Technologies
Proofpoint
25.0
−
−
07/23/13
Sourcefire
Cisco Systems
2,193.6
247.4
8.9x
07/18/13
PasswordBank
Symantec
24.9
−
−
07/08/13
Aveksa
EMC/RSA
225.0
−
−
05/20/13
Websense
Vista Equity Partners
971.1
359.4
2.7x
05/06/13
StoneSoft
McAfee
326.0
46.6
7.0x
04/29/13
Arkoon Network Security
Cassidian CyberSecurity
17.2
16.4
1.0x
04/09/13
Mail Distiller
Proofpoint
4.4
−
−
12/05/12
Zenprise
Citrix Systems
324.2
−
−
10/30/12
Silver Tail Systems
EMC/RSA
350.0
−
−
10/17/12
Motex
Kyoera
171.5
38.1
4.5x
09/13/12
Sensage
KEYW
85.5
12.1
7.1x
24 TTM Revenue ($M)
EV / Revenue
Notable Security M&A Transactions
Date
Target
Buyer
TTM Revenue ($M)
EV / Revenue
07/27/12
AuthenTec
Apple
378.3
76.1
5.0x
07/02/12
BreakingPoint
Ixia
150.4
40.2
3.7x
06/20/12
Wavelink
LANDesk Software
82.0
−
−
04/23/12
Memento & Integrated Compliance
Fidelity National Information Services
45.1
−
−
04/03/12
LogLogic
TIBCO
03/13/12
SonicWALL
Dell
02/13/12
Mykonos Software
01/11/12
Compliance 360
01/09/12
LiveOffice
131.6
−
−
1,200.0
−
−
Juniper Networks
82.6
−
−
SAI Global
42.3
−
−
Symantec
115.0
−
−
Mean
284.5
121.5
4.8x
82.0
40.1
3.3x
Median
25 VC Activity in
Security
Financing Activity Reached New Heights in 2015
Security Startups Raised $10.9 Billion Across 1074 Deals Since 2010.
248
59
Investments ($B)
§  Deals and dollars increased steadily, both
growing by more than 100% in 2015 compared
to 2010 levels
§  Funding in 2015 surpassed 2014 by $1B but
number of deals were relatively flat
$269
$427
64
59
59
59
$1,178
$1,188
59 60
$859
$522 $549
$515 $542
Investments ($M)
Q1'15
Q4'14
Q3'14
Q2'14
Q4'13
$261
Q2'13
$219 $259 $242 $248 $264
Deals
$510
33
Q4'12
2015
24
70
$822 $821
42
$446 36
Q3'12
2014
35
Q1'12
2013
$141 $130
31
Q4'11
2012
30
Q3'11
2011
Q3'10
2010
Q2'10
$0.8
Q1'10
$197 $212 $236
$1.2
$0.8
23
28
Q2'11
$1.7
30
Q1'11
27
Q4'10
$2.7
120
40
60
49
Q3'13
47
156
108
51
Q1'13
$3.8
Q2'12
201
Q1'14
242
Deals
§  Over the last eight quarters investors have poured $6.5B into cybersecurity
§  On a quarterly basis, 3Q15 and 4Q15 were the strongest for investment, with value of deals reaching
over $2.4B
§  Quarterly number of deals hit a peak in 2Q15 with 70 deals
Source: Momentum Partners, CB Insights.
27 Q4'15
($M) (Q1 2010 – Q4 2015)
Q3'15
Investment Deals And Dollars
($M) (2010 – 2015)
Q2'15
Investment Deals And Dollars
Security Startups And Investors
List Of Most Well-Funded Startups And Most Active VC Investors.
Most Well-Funded Security Startups ($M)
302
301
Most Active Investors in Security*
20
301
19
275
17
17
16
232
186
183
182
176
156
16
15
14
11
143
138
136
135
134
10
10
9
9
8
§  The top 15 most well-funded startups have raised $3.0B over their lifespan, with §  Among investors, Intel Capital is the most active investor having invested in
20 companies since 2010
42% ($1.2B) being raised in 2015 alone
§  Tanium tops the list and is the hottest cybersecurity company, having raised
§  Accel Partners and Sequoia Capital followed with 19 and 17 investments,
$212M in 2015 and over $300M since 2007
respectively
§  Since 3Q15 the minimum funding increased from $100M to $134M and four
new companies were added (Digital Guardian, Code42, Forescout & Tenable)
Source: PitchBook Data, Crunchbase.
* Investments in rounds with minimum size of $5 million.
28 Venture Capital Activity
Venture Capital Raises >$10 Million Have Substantially Risen Since January 2014.
Investment
Date
Selected Investor(s)
16-Dec-15
Danhua Capital, Linear Capital Partners,
Sparkland Ventures, Trust Bridge Partners
Trustlook develops a static analysis platform for detecting suspicious behavior and malicious
characteristics for Android operating systems.
16-Dec-15
Brookline Venture Partners, Fairhaven Capital
Partners, GE Pension Trust, LLR Partners
Digital Guardian provides data security solutions to protect data from insider and outsider
threats.
15-Dec-15
American Express Ventures, BDC Venture
Capital, Blumberg Capital, Tenfore Holdings
Trulioo provides online portal for identity verification services.
11-Dec-15
Alsop Louie Partners, Neuberger Berman,
NewSpring Capital
Lookingglass Cyber Solutions develops cyber threat intelligence monitoring and management
platforms.
9-Dec-15
Amadeus Capital Partners, Aspect Venture
Partners, Bain Capital Ventures
ForeScout enables organizations to continuously monitor and mitigate security exposures and
cyber attacks.
3-Dec-15
Core Capital Partners, Genacast Ventures,
Highland Capital Partners, NEA
ZeroFOX provides real-time social threat analytics, intelligence, and advanced security
protection via its cloud-based cyber platform.
2-Dec-15
JMI Equity
Avecto's Defendpoint software protects endpoints from malware and cyberattacks through
privilege management, application control and sandboxing technology.
2-Dec-15
Blu Venture Partners, NEA, Center for Innovative
Technology
ThreatQuotient offers a software platform that helps security teams mitigate cyber attacks by
aggregating and managing intelligence on threats.
1-Dec-15
Grotech Ventures, SAP National Security
Services
ThreatConnect provides a cyber threat intelligence platform that allows global organizations to
manage massive amounts of threat information.
1-Dec-15
Alibaba, GE Ventures, Jérusalem Venture
Partners, Poalim Ventures
Theta Ray offers malware detection and prevention solutions for critical infrastructure,
communication systems, and financial systems.
20.0
17-Nov-15
Arsenal Venture Partners, Crosslink Capital,
Paladin Capital, Tola Capital, Trinity Ventures
ProtectWise offers cloud-based network security services.
20.0
11-Nov-15
Menlo Ventures, Jerusalem Venture Partners,
OurCrowd, Draper Nexus
AppDome’s dynamic wrapping SaaS technology provides shield to enterprise and consumerfacing apps from advanced cyber threats, mobile fraud, and data theft.
Company
Business Description
29 Amount
Raised ($M)
17.0
66.0
10.9
50.0
75.4
27.0
49.0
10.2
16.0
13.0
Venture Capital Activity
Investment
Date
Amount
Raised ($M)
11-Nov-15
Norwest Venture Partners, Invus Group,
Accolade Partners, Shasta Ventures
TigerText provides security software for text messaging for physicians to use on their mobile
devices.
50.0
10-Nov-15
Insight Venture Partners, Accel Partners
Tenable Network Security specializes in developing software that enables real-time network
monitoring to detect hackers and other malicious actors.
9-Nov-15
Costanoa Ventures, Foundation Capital, Split
Rock Partners, Triangle Peak Partners
Guardian Analytics is provider of fraud prevention software for protecting online channels and
accounts.
3-Nov-15
Goldman Sachs
iboss Cybersecurity provides innovative APT Defense, Web Security and Mobile Security
Solutions.
2-Nov-15
Foundation Capital, Matrix Partners,
Northbridge Venture Partners
Confer provides endpoint detection and response solution (EDR) that proactively identifies
attacks and provides real-time visibility across all endpoints.
17.0
30-Oct-15
Merck Global Health Innovation Fund
Exostar develops B2B information sharing software.
15.0
29-Oct-15
Undisclosed
Lumeta provides network situational awareness platform which is source for enterprise network
infrastructure and cybersecurity analytics.
13.0
27-Oct-15
Aspect Venture Partners, US Venture Partners
Cato Networks provides cloud-based platform to manage multiple hardware and software
products and provide security against hacking, data theft and other security problems.
20.0
27-Oct-15
Index Ventures, Storm Ventures
SourceClear develops software security platform for developers that help organizations identify
components across software portfolio.
10.0
25-Oct-15
Trident Cybersecurity, KPCB
IronNet Cybersecurity provides suite of technologies that provide real-time threat assessment
and updates and consulting services.
14-Oct-15
Allegis Capital, Cowboy Ventures, KPCB, First
Round Capital, Icon Ventures
Area 1 Security provides campaign delivery systems and allows enterprises to identify cyber
attacks and other attacking campaigns before they unfold using their anti phishing platform.
14-Oct-15
.406 Ventures, Accomplice VC, Agman Partners,
Evolution Equity Partners
Bit9 provides endpoint threat detection, response, and prevention solutions to detect and stop
cyber threats.
Company
30 250.0
10.9
35.0
32.5
15.0
54.5
Investment
Date
Amount
Raised ($M)
13-Oct-15
GSR Ventures, NEA
DataVisor provides big data security analytics to help protect consumer-facing websites and
mobile apps from cyber criminals.
14.5
13-Oct-15
Charles River Ventures, Softbank, Spark Capital
Cybereason delivers a technology platform that automatically uncovers malicious operations,
reconstructing them as a clear image of a cyberattack in context.
7-Oct-15
Granite Hill Capital Partners, SineWave
Ventures, The Data Collective, Third Point
Sentinel Labs provides monitoring technology to protect workstations and mobile phones from
threats.
6-Oct-15
Accel Partners, JMI Equity, NEA, Split Rock
Partners
Code42 Software provides secure cloud services for endpoint data protection and security that
allow their users to limit risk, meet data privacy regulations, and recover from data loss.
30-Sep-15
KPMG
Norse delivers continuously-updated and unique Internet and darknet intel that helps
organizations detect and block attacks.
29-Sep-15
DAG Ventures, AME Cloud Ventures, Juniper
Networks, Intel Capital, IA Ventures, Accel
Vectra Networks’ X-series platform uses next-gen compute architecture and combines data
analytics and machine learning to detect attacks.
29-Sep-15
Icon Ventures, Aspect Ventures, Shlomo Kramer,
Norwest Venture Partners
Exabeam offers machine-learning technology that focuses on cyber attacker behavior to detect
modern cyber attacks.
25-Sep-15
Arsenal Venture, EDB Investments, Fairhaven
Capital Partners, Ten Eleven Ventures
CounterTack provides real-time endpoint threat detection and response solutions to enterprises
and government organizations.
22-Sep-15
Baidu, Fidelity Management, Qualcomm
Ventures, Microsoft, NEA, Google, Venrock
CloudFlare is a web performance and security company that provides online services to protect
and accelerate websites online.
21-Sep-15
Orchard Holdings Group
Morphick team has developed the only proven platform-enabled managed service to enable
their customers to prevent, detect, and respond to even the most advanced attacks.
17-Sep-15
Tano Capital
Tascent develops and deploys biometric identity products and solutions based upon a strong
heritage in iris recognition and multimodal high throughput and mobile biometrics.
10-Sep-15
Allianz Digital, Vertex Venture Capital, Magma
Venture, SBI Holdings, Magna International
Argus is an automotive cybersecurity pioneer, helping car manufacturers, their Tier I suppliers
and aftermarket connectivity providers protect connected cars from car hacking.
Company
31 59.0
25.0
85.6
11.4
35.1
25.0
17.9
108.7
10.0
18.5
26.0
Investment
Date
10-Sep-15
IVP, TPG, Andreessen Horowitz, T. Rowe Price
Tanium provides security and systems management solutions to allow real-time data collection.
8-Sep-15
Andreessen Horowitz, Greylock, Sequoia,
Altimeter Capital, Glynn Capital, Khosla
Okta is an integrated identity and mobility management service.
75.0
3-Sep-15
ICONIQ, Accel Partners, Lightspeed, Social
+Capital Partnership
Netskope performs deep usage analytics and enforces business and security policies in cloud
apps.
75.0
2-Sep-15
Bessemer Venture Partners, Citi Ventures,
Innovation Endeavors, Marker, NEA
Illusive networks offers deception technology enabling protection against targeted attacks and
APTs.
22.0
25-Aug-15
.406 Ventures, Arsenal Venture Partners,
Evolution Equity Partners
Onapsis provides solutions for securing business-critical applications and infrastructure.
17.0
24-Aug-15
Bessemer Venture Partners, Thomas Noonan
Bastille is pioneering IoT security with next-generation security sensors and airborne emission
detection, allowing corporations to accurately quantify risk and mitigate threats.
13.8
19-Aug-15
Benchmark, Meritech Capital, Shasta Ventures,
Tenaya Capital, Lightspeed, Musea
CloudPassage provides server security products for public and hybrid cloud hosting
environments.
18-Aug-15
IVP, GGV Capital, KPCB, Trident Capital
AlienVault’s Unified Security Management Platform delivers a unified, simple and affordable
solution for threat detection, incident response and compliance management.
3-Aug-15
Google Capital, TPG Capital, EMC, Lightspeed
Venture Partners
Zscaler offers integrated, cloud-delivered Internet security including web security, firewalls,
mobile security, IoT security and DLP.
28-Jul-15
DFJ Growth, Dell Ventures, KKR, Blackstone,
Thomvest, Khosla, Draper Nexus, TenEleven
Cylance utilizes artificial intelligence, algorithmic science and machine learning to proactively
protect organizations against advanced threats.
24-Jul-15
Accelerate IT Ventures, Trident Capital,
Panasonic Venture Group
Mocana creates and develops mobile application protection (MAP) app-shielding solutions,
enabling users to secure mobile apps.
14-Jul-15
Summit Partners
Darktrace’s Enterprise Immune System technology detects unidentified threats in real time,
powered by machine learning and mathematics developed at the University of Cambridge.
Company
32 Amount
Raised ($M)
147.5
35.9
52.0
110.0
42.0
14.8
25.0
Investment
Date
Company
Amount
Raised ($M)
13-Jul-15
Accel Partners, Google Capital, Rackspace,
Warburg Pincus
CrowdStrike is a global provider of security technology and services focused on identifying
advanced threats and targeted attacks.
13-Jul-15
Allegis Capital, Marc Benioff, Blackstone, Igor
Sill, Kevin Plank, Christian Lawless
RedOwl Analytics provides proactive risk oversight software solutions for compliance, insider
threat & investigations.
1-Jul-15
Pinnacle Ventures, Redpoint Ventures, Quihoo
360 Technology
PSafe is a Brazilian company developing Secure Cloud Computing software suites such as the
PSafe Antivirus for safe internet browsing.
25-Jun-15
Insight Venture Partners
CheckMarx.com develops software solutions that are used to identify security vulnerabilities in
Web and mobile applications.
24-Jun-15
Benchmark, New Enterprise Associates, Marc
Benioff, David Sacks, Drew Houston
HackerOne provides a vulnerability management and bug bounty platform.
24-Jun-15
New Enterprise Associates, Sigma Prime
Ventures
Barkly uses high-performance local analytics and a unique design to stop attacks in the moment
while preventing tampering from users and attackers.
18-Jun-15
Bessemer Venture Partners, Correlation
Ventures, IDEA Fund Partners, Techstars
Distil’s SaaS bot detection and mitigation solutions work like a protective shield and block
malicious bots, malware and competitors’ that try to scrape websites without permission.
9-Jun-15
Intel Capital, QuestMark Partners, Silver Lake
Partners
Venafi provides enterprise key and certificate management security solutions.
8-Jun-15
Engineering Capital, General Catalyst, Osage
University Partners, Sutter Hill Ventures
Menlo Security is a stealth cyber security company that develops security solutions eliminating
the threat of advanced malware.
25.0
1-Jun-15
Foundation Capital, Matrix Partners, Sapphire
Ventures, Trinity Ventures, Chris Rust
Cyphort develops cloud services, software, and appliance-based solutions to protect enterprises
against the newest cyber threats.
30.0
28-May-15
Excel Venture Management, Flare Capital,
Heritage Group, HLM Venture, NVP, Merck
ClearDATA offers security, privacy, and compliance services to the hospitals, physician
practices, electronic medical record software, and healthcare markets.
25.0
20-May-15
Carmel Ventures, Lightspeed Venture Partners
enSilo offers a real-time targeted attack exfiltration prevention platform.
33 100.0
17.5
30.0
84.0
25.0
12.5
21.0
39.0
10.0
Investment
Date
19-May-15
China Broadband Capital Partners, China
Growth Capital, IDG Capital Partners
FraudMetrix provides network risk and fraud services, serving institutional clients in the
banking, third party payment, credit dealers and gaming industries.
19-May-15
Andreessen Horowitz, Corazon Capital
Keybase allows users to easily encrypt, decrypt and share messages within a tried-and-tested
encryption standard.
18-May-15
Espírito Santo Ventures, Oak HC/FT, Sapphire
Ventures
Feedzai provides a platform that uses real-time, machine-based learning to help payment
networks, banks and retailers prevent fraud in omnichannel commerce.
18-May-15
Comcast Ventures, Commonwealth Capital,
Flybridge Capital, Globespan Capital
BitSight provides a security rating platform, which analyzes external data on security behaviors
that allows to manage third party risk, and benchmark performance.
23.0
6-May-15
Spark Capital, CRV, Lockheed Martin
Cybereason delivers a technology platform that automatically uncovers malicious operations,
reconstructing them as a clear image of a cyberattack in context.
25.0
16-Apr-15
Reed Elsevier Ventures, Atlas Venture, Balderton
Capital, GV, IA Ventures, In-Q-Tel
Recorded Future arms organizations with real-time threat intelligence, allowing them to
proactively defend against cyber attacks.
15-Apr-15
Index Ventures, Intel Capital, Sutter Hill
Ventures
Skyport Systems develops enterprise security and hyper-secured infrastructure solutions for
critical IT and corporate assets.
30.0
14-Apr-15
HP Ventures, Index Ventures, Sequoia Capital,
Rembrandt
Adallom is a cloud access security broker which delivers visibility, governance and protection
for cloud applications.
30.0
14-Apr-15
Accel Partners, Andreessen Horowitz,
BlackRock, General Catalyst, Formation 8
llumio provides cloud solutions, specializing in virtualization, networking, and security hailing
services.
9-Apr-15
Venrock, Index Ventures, New Enterprise
Associates
Niara's solution blends diverse data sources, sophisticated analytics and forensics to discover
compromised users, provide insight into malicious insiders.
8-Apr-15
Andreessen Horowitz, Citi
Tanium provides security and systems management solutions to allow real-time data collection.
6-Apr-15
DRW Investors, Icon Ventures, Leapfrog
Ventures, Math Venture Partners
RedSeal develops security risk management (SRM) software and solutions and helps companies
eliminate cyber threats.
Company
34 Amount
Raised ($M)
30.0
10.8
17.5
12.0
100.0
20.0
64.0
17.0
Investment
Date
Company
Cisco, EPIC Ventures, Trident Capital, Vanedge
Capital, Vmware, AITV, Fortinet
HyTrust, a cloud security automation company, provides administrative control, auditing, &
data security for private, hybrid, and public clouds.
26-Mar-15
AITV, Cisco, EPIC Ventures, Fortinet, Granite
Ventures, and others
PhishMe provides training to employees against phishing threat enabling them to identify,
report, and mitigate spear phishing, malware and drive-by threat.
26-Mar-15
Accel Partners, Flybridge Capital Partners,
Greycroft Partners, Millenium Technology
BetterCloud provides critical insights, automated management, and intelligent data security for
cloud office platforms.
25-Mar-15
Neuberger Berman Group, Alsop Louie Partners
Lookingglass Cyber Solutions develops cyber threat intelligence monitoring and management
platforms.
24-Mar-15
Bain Capital Ventures, Commerce Ventures,
Lightspeed Venture Partners
InAuth is the most complete mobile authentication and anti-fraud solution offering multiple
security options to financial institutions and the mobile transaction market.
20-Mar-15
August Capital, Engineering Capital, Norwest
Venture Partners, Wing Venture Partners
Palerra provides software that combines threat detection, predictive analytics, security
configuration management and automated incident response & remediation in one platform
19-Mar-15
ONSET Ventures, Voyager Capital, Presidio
Ventures, LDV Partners, Envision Ventures
Vidder mitigates network-based attacks by making servers invisible to everyone except
authorized users.
19-Mar-15
Benchmark Capital, GV, Lead Edge Capital,
Radar Partners, Redpoint Ventures, others
Duo Security provides two-factor authentication as a service to prevent account takeover and
data theft.
18-Mar-15
Invoke Capital, Hoxton Ventures, Talis Capital
Darktrace, a cyber security company, offers intelligence-led behavioral cyber defense solutions
for cyber-attack vectors.
10-Mar-15
Allegis Capital, March Capital Partners, The
Hive
E8 Security helps enterprises analyze and detect advanced attacks and malicious insider
activities.
26-Feb-15
Undisclosed
Silent Circle is a global encrypted communications service that provides cutting-edge encrypted
text, e-mail, mobile phone and video teleconferencing services.
26-Feb-15
Sierra Ventures, Samsung Ventures, Telstra
Ventures, Lazarus Israel, Toyo Corporation
Zimperium, a mobile cyber security company, develops Mobile Intrusion Prevention System.
1-Apr-15
35 Amount
Raised ($M)
33.0
13.0
25.0
20.0
23.5
17.0
12.0
30.0
18.4
10.7
50.0
12.0
Investment
Date
25-Feb-15
Rogers Venture Partners, Blue Sky Capital
SecureKey develops platform-as-a-service based hardware and software solutions for chip-based
identity and payment technologies.
18-Feb-15
Institutional Venture Partners, Andreessen
Horowitz, Felicis Ventures, Redpoint, Citi
Pindrop Security provides caller-ID products to detect, report, and mitigate phone fraud.
17-Feb-15
BOLDStart Ventures, Evolution Equity Partners,
Sequoia Capital
SecurityScorecard is a provider of security risk assessment service for cloud-based information
systems.
10-Feb-15
Alcatel Lucent, Bessemer Venture Partners,
Cisco, Innovation Endeavors, Marker
Team 8 is an incubator for cyber-security firms with specialty in defending against targeted,
human-driven cyber-attacks
10-Feb-15
83North, Bessemer Venture Partners
Wandera provides security and management of mobile data for global enterprises.
26-Jan-15
Bessemer Venture Partners, Columbia Capital
Verato helps rightly identifying individuals regardless of whether their names, addresses or other
personal information was incorrect or out-of-date.
16-Jan-15
Avalon Ventures, NHN Investment Corp
Air Computing cloud platform AeroFS allows enterprise customers to synch and share all data
securely behind a firewall with unlimited storage.
13-Jan-15
KPCB, Meritech Capital Partners, Icon Ventures,
Google Ventures, TechOperators
Ionic Security offers a unified data and mobility security platform.
31-Dec-14
Bessemer Venture Partners
iSight Partners provides cyber threat intelligence solutions to public sector and commercial
entities in the United States.
19-Dec-14
KPCB, Google Ventures, Greylock Partners,
GGV Capital, Icon Ventures
Synack provides a cloud-based platform that enables customer data integrity, privacy, and
confidentiality.
25.0
16-Dec-14
Charles River Ventures, Scale Venture Partners,
Social+Capital Partnership
OneLogin's cloud-based Identity and Access Management solution allows enterprises of all
sizes to secure their cloud and on-premise apps for all users and devices.
25.0
16-Dec-14
ATA Ventures, Northgate Capital, RWI Ventures,
TVC Capital
EdgeWave engages itself in the design, development and marketing of internet security
appliances, services and offers secure content management and policy compliance services.
Company
36 Amount
Raised ($M)
19.0
35.0
13.7
18.0
15.0
12.5
10.0
40.1
30.0
13.0
Investment
Date
16-Dec-14
Technology Crossover Ventures, Bain Capital
Ventures
Rapid7 provides vulnerability management and security data and analytic software solutions
and services.
9-Dec-14
Grotech Ventures, Khosla Ventures, Citi Ventures
DB Networks provides behavioral analysis solutions for intrusion detection and database
security.
17.0
9-Dec-14
DCM, DDS, DoCoMo Capital, ONSET
Ventures, Raven Venture Partners and others
Nok Nok Labs develops products and services for online security and authentication.
16.3
8-Dec-14
Summit Partners, Battery Ventures, Florence
Venture Partners
RiskIQ provides a software-as-a-service product that eliminates online and mobile threats.
8-Dec-14
Auriga Partners, VI Partners, Mannai Corp
Nexthink is the innovator of End-user IT Analytics for security, ITSM and workplace
transformation.
4-Dec-14
Palladin Capital, Google Ventures, IVP, General
Catalyst Partners
ThreatStream’s Optic platform is a security intelligence solution that aggregates millions of
threat indicators into existing security systems.
19-Nov-14
T-Venture, Delta Partners, Andreessen Horowitz,
Transamerica Ventures
CipherCloud provides cloud information protection solutions.
19-Nov-14
Bessemer, Columbia Capital, KPCB, Paladin
Capital, Top Tier, Edgemore Capital, Savano
Endgame provides security intelligence and analytics solutions for real-time visibility and
actionable insight across their digital domains.
18-Nov-14
Osage Partners, General Catalyst Partners
Menlo Security, a stealth cyber security company, develops a security solution that eliminates
the threat of advanced malware.
10.5
18-Nov-14
IPV Capital, ANT Financial
V-Key provides mobile application threat research, protection, and intelligence solutions.
12.0
11-Nov-14
NEA, Sequoia Capital
Forter provides a software to reduce frauds during transaction.
15.0
31-Oct-14
Battery Ventures, Amplify Partners, Chris Rust,
Nick Mehta
Veradocs, a data-security company, secures and shares digital information across platforms and
devices.
Company
37 Amount
Raised ($M)
31.0
27.5
14.5
22.5
50.0
30.0
10.0
Investment
Date
22-Oct-14
Benhamou Global Ventures, Javelin Venture
Partners, Lakewood & Co, Vital Venture
Spikes Security provides browser-based security software solutions to businesses.
12.0
30-Sep-14
NTT DoCoMo Ventures, Octopus Investments,
Paladin Capital
Certivox provides application and content security, as well as on-demand encryption key
generation services.
11.3
30-Sep-14
Draper Fisher Jurvetson, MeriTech Capital
Partners
Good Technology Corporation provides secure mobility solutions for enterprises and
governments worldwide.
30-Sep-14
Pelion Venture Partners, Third Point Ventures,
Akamai Technologies
Krimmeni Technologies manufactures, markets, and licenses data security systems for device
manufacturers and content providers.
23-Sep-14
Alloy Ventures, Battery Ventures, Scale Venture
Partners, First Round Capital
Agari Data provides email security solutions.
15.0
22-Sep-14
Benchmark Capital, True Ventures, Radar
Partners, Google Ventures
Duo Security provides two-factor authentication as a service to prevent account takeover and
data theft.
12.8
18-Sep-14
DFJ, KKR, Sapphire Ventures, General Catalyst,
Volition Capital, Ten Eleven
Ping Identity Corporation provides cloud identity security and management solutions.
16-Sep-14
Cisco, Edison Partners, Georgian Partners,
Northleaf Capital Partners, VentureLink
eSentire has reinvented enterprise network security by focusing on protecting your core assets
inside the network through our human driven, behavior-based solution.
11-Sep-14
Wellington Management, .406 Ventures, Atlas
Venture, Meritech Capital, In-Q-Tel, Polaris
Veracode offers a cloud-based application security platform for managing enterprise-wide
governance programs
10-Sep-14
Battery Ventures, Glilot Capital Partners,
Amplify Partners
Light Cyber develops solutions for identifying and preventing cyber-attacks and advanced
persistent threats.
20-Aug-14
Citi Ventures, Columbus Nova Technology
Partners, Work-Bench
vArmour Networks provides software-defined security solutions for virtualized data centers and
government cloud operators.
18-Aug-14
Battery Ventures, 83North
GuardiCore provides network security solutions for software-defined data centers.
Company
38 Amount
Raised ($M)
80.0
11.7
35.0
12.7
40.0
10.0
21.0
11.0
Investment
Date
13-Aug-14
Accel, Goldman Sachs, Index Ventures, T.Rowe
Price, A16, Khosla, Wellington, Bezos
Lookout develops and delivers cloud-based consumer mobile device security applications for
iPhones and iPads.
13-Aug-14
China Broadband Capital Partners, Linear
Venture, IDG Capital Partners
FraudMetrix provides network risk and fraud services, serving institutional clients in the
banking, third party payment, credit dealers and gaming industries.
10.0
12-Aug-14
Dell Ventures, Presidio Ventures, Redpoint
Ventures, eVentures
Lastline provides cloud-based systems and processes for the analysis of malware.
10.0
6-Aug-14
Sequoia Capital, Tenaya Capital, Nexus Venture
Partners
Druva Software provides data protection and governance solution for public and private clouds
in an enterprise.
6-Aug-14
Toba Capital
SecureAuth is a technology leader in universal identity enforcement for mobile devices, cloud
applications and networks.
5-Aug-14
New Enterprise Associates, Norwest Venture
Partners, SingTel Ventures
Bitglass provides security solutions that automatically segments, tracks, and secures businesses’
sensitive data across cloud and mobile.
25.0
5-Aug-14
Accel Partners, Intel Capital, Khosla Ventures,
Juniper, AME Ventures, IA Ventures
Vectra Networks’ X-series platform uses next-gen compute architecture and combines data
analytics and machine learning to detect attacks.
25.1
29-Jul-14
Jerusalem Venture Partners, Poalim Ventures
Theta Ray offers malware detection and prevention solutions for critical infrastructure,
communication systems, and financial systems.
10.0
25-Jul-14
Baird Venture Partners, Jump Capital, Math
Venture Partners
NowSecure develops and provides mobile security solutions for the financial, healthcare, and
governmental institutions.
12.5
23-Jul-14
ABS Capital Partners, Signal Peak Ventures
Bask Technology provides remote technology and proactive maintenance services for private
homes and small businesses in the United States and internationally.
17.8
22-Jul-14
Riverwood Capital, Adams Street Partners,
Access Venture Partners, Piper Jaffray
LogRhythm provides log management and security information and event management
solutions.
22-Jul-14
Frontier Capital
InteliSecure provides a portfolio of information and network security services to help
organizations protect their most critical assets.
Company
39 Amount
Raised ($M)
150.0
25.0
10.0
40.0
14.3
Investment
Date
Company
Amount
Raised ($M)
10-Jul-14
Highland Capital Partners
Malwarebytes develops anti-malware technologies to detect and remove malicious programs
from PCs.
4-Jul-14
Adams Street Partners, March Capital Partners,
Summit Partners, Telstra Ventures
Telesign provides mobile identity solutions.
27-Jun-14
Mayfield Fund, Pelion Venture Partners, Third
Point Ventures
Elastica provides cloud security solutions for businesses and their employees.
25-Jun-14
Alsop Louie Partners, Breyer Capital, CME
Ventures, Dolby Family Ventures
Wickr develops a mobile messaging platform that specializes in offering data security services.
24-Jun-14
Grotech Ventures, Paladin Capital
White Ops detects bots, in real time, at web scale.
23-Jun-14
Sequoia Capital, Salesforce Ventures, Greylock
Partners
Skyhigh Networks enables companies to adopt cloud services with appropriate security,
compliance and governance.
22-Jun-14
Andreessen Horowitz
Tanium provides security and systems management solutions to allow real-time data collection
to enterprises and Fortune 500 customers.
19-Jun-14
Accel Partners, Foundation Capital, Meritech
Capital Partners
ForgeRock creates identity relationship management solutions for the modern Web including
public cloud, private cloud, hybrid cloud, and enterprise and mobile environments.
16-Jun-14
Arsenal Venture Partners, Fairhaven Capital,
Lucent Asset Management, Goldman Sachs
CounterTack provides real-time endpoint threat detection and response solutions to enterprises
and government organizations.
16-Jun-14
Redpoint Ventures, Founders Fund, Bridgescale,
Radar Partners, A-Grade
BitGo operates a Bitcoin security platform that offers multi-signature security-as-a-service
solutions.
12.0
10-Jun-14
Norwest Venture Partners, Aspect Ventures,
Shlomo Kramer
Exabeam offers machine-learning technology that focuses on cyber attacker behavior to detect
modern cyber attacks.
10.0
10-Jun-14
Crosslink Capital, Trinity Ventures, Paladin
Capital, Arsenal Venture
ProtectWise offers cloud-based network security services.
14.1
40 30.0
49.4
20.0
30.0
11.1
40.0
90.0
29.9
20.0
Investment
Date
Company
Amount
Raised ($M)
9-Jun-14
Altimeter Capital, Andreessen Horowitz,
Greylock Partners, Janus Capital
Okta is an integrated identity and mobility management service.
2-Jun-14
Blumberg Capital, Intel Capital, Swarth Group
Fortscale Security develops data security systems which analyzes information and tracks
patterns of potential security threats.
10.0
28-May-14
Bessemer Venture Partners, Correlation
Ventures, IDEA Fund Partners, Techstars
Distil’s SaaS bot detection and mitigation solutions work like a protective shield and block
malicious bots, malware and competitors’ that try to scrape websites without permission.
10.1
21-May-14
Cain Capital, Ross Perot
Silent Circle is a global encrypted communications service that provides cutting-edge encrypted
text, e-mail, mobile phone and video teleconferencing services.
20-May-14
Samsung Venture, Fortinet, DoCoMo Capital,
Accel, Mayfield, Northgate, BDCA Venture
Centrify Corporation provides unified identity management across data center, cloud, and
mobile.
15-May-15
Accel Partners, Lightspeed, Social+Capital
Partnership
Netskope performs deep usage analytics and enforces business and security policies in cloud
apps.
35.0
15-May-14
Glynn Capital, Mohr Davidow, Greylock,
Sequoia Capital, Cisco, Lumia, Sutter Hill
OpenDNS operates as a security company that provides Internet security and domain name
system services to secure the networks.
35.0
15-May-14
Bank of Montreal, Business Development Bank
of Canada
BlackRidge helps in authenticating and authorizing all network connections before they are
established, stopping malicious attacks that would bypass conventional security measures.
20.2
14-May-14
First Round Capital, Max Levchin, Spark
Capital, Union Square Ventures
Sift science provides of a platform that monitors website traffic to alert clients of fraudulent
activity.
18.1
14-May-14
Spectrum Equity
Verafin is a leading provider of compliance, anti-money laundering (AML) and fraud detection
software.
29-Apr-14
NEA, Core Capital, Genacast Ventures, Enrique
Salem, Comcast Ventures, TCP
ZeroFOX provides real-time social threat analytics, intelligence, and advanced security
protection via its cloud-based cyber platform.
10.3
23-Apr-14
Accel Partners, Tiger Global, Westly Group,
Granite Hill Capital, Data Collective
SentinelOne helps enterprises stop targeted attacks with automatic mitigation and provides realtime forensics across multiple platforms.
12.0
41 75.0
30.0
42.0
55.1
Investment
Date
22-Apr-14
Adams Street Partners, Blumberg Capital, GRA
Venture Fund, Imlay Investments
Damballa discovers active threats that bypass all security prevention layers.
16-Apr-14
The Stephens Group, Treetop Ventures
Armor offers customer-centric security outcomes for retail and eCommerce enterprises,
healthcare organizations, payment leaders and financial institutions.
24-Mar-14
August Capital, Adams Street Partners, U.S.
Venture Partners, USVP, Tenaya, CM Capital
ThreatMetrix provides context-based business security and fraud prevention solutions for
businesses in various industries worldwide.
19-Mar-14
General Electric Pension Trust, Brookline
Venture Partners, Fairhaven Capital
Digital Guardian provides data security solutions to protect data from insider and outsider
threats.
12.0
15-Mar-14
Paladin Capital, Yaletown Venture Partners, Rho
Canada Ventures, Zinc Ventures
Shadow Networks’ solutions detect and mitigate the large number of APTs on enterprise and
government networks.
13.7
14-Mar-14
Index Ventures, Emergence Capital, Greylock
Partners, AME Ventures, Blockchain Capital
Xapo develops and delivers online and offline security solutions for Bitcoin, a digital currency.
5-Mar-14
Allied Minds
Optio Labs develops transformational mobile security technologies for the federal and corporate
enterprise.
5-Mar-14
KPCB, Allegis Capital, Norwest, Venrock,
Google Ventures, Sierra Ventures
Shape Security develops web defense products to protect e-commerce and social network
websites.
27-Feb-14
ONSET Ventures, DCM Ventures, Lenovo Group
Nok Nok Labs develops products and services for online security and authentication.
20-Feb-14
Blackstone Group, Khosla Ventures, Fairhaven
Capital
Cylance provides enterprise, critical infrastructure and embedded cyber security solutions.
20-Feb-14
KPCB, Icon Ventures, TechOperators, Google
Ventures, ff Venture, Webb Investment
Ionic Security offers a unified data and mobility security platform.
13-Feb-14
Atlas Venture, Highland Capital, KPCB, Sequoia
Capital, .406 Ventures, Blackstone
Bit9 provides endpoint threat detection, response, and prevention solutions to detect and stop
cyber threats.
Company
42 Amount
Raised ($M)
13.0
25.0
20.0
40.0
10.0
40.0
16.5
20.0
25.6
38.2
Investment
Date
12-Feb-14
Benchmark Capital, Meritech Capital Partners,
Shasta Ventures, Tenaya Capital
CloudPassage provides server security products for public and hybrid cloud hosting
environments.
7-Feb-14
Draper Nexus, Menlo Ventures
vArmour Networks provides software-defined security solutions for virtualized data centers and
government cloud operators.
27-Jan-14
Easton Capital, OrbiMed Advisors, Shasta
Ventures, TELUS Ventures, New Leaf Venture
TigerText provides security software for text messaging for physicians to use on their mobile
devices.
23-Jan-14
Bessemer Venture Partners, Ascent Venture
Partners, Cedar Fund, Salesforce
CloudLock provides cloud data security solutions.
21-Jan-14
Accel Partners, Innovation Endeavors, Glilot
Capital Partners
Aorato develops a technology that provides protection to enterprise resources from advanced
cyber attacks.
21-Jan-14
Index Ventures, Sequoia Capital, Zohar Zisapel
Adallom is a cloud access security broker which delivers visibility, governance and protection
for cloud applications.
20-Jan-14
Tenaya Capital, Andreessen Horowitz, SV
Angel, Andy Bechtolsheim
Bluebox Security operates as a stealth startup tackling enterprise mobile security company.
9-Jan-14
Wing Venture Capital, Norwest Venture Partners
Dtex Systems develops and provides secure user activity solutions.
7-Jan-14
BlueRun Ventures, Lightspeed China Partners,
Matrix Partners
QingCloud is a cloud computing platform that provides IaaS-based flexible cloud services.
Company
Total Amount Raised ($M)
Median Amount Raised ($M)
43 Amount
Raised ($M)
25.6
15.0
21.0
17.0
10.0
15.0
18.0
15.4
20.0
5,302.0
20.0
Security Public
Trading Analysis
Security Sector vs Benchmark Performance
Equity Performance Was A Tale Of Two Halves In 2015.
160
150
3 Months
6 Months
12 Months
High Growth
(21.5%)
(31.3%)
0.0%
Low Growth
(7.0%
(12.5%)
(16.1%)
NASDAQ
(8.7%)
(14.2%)
(3.8%)
S&P 500
(7.5%)
(11.6%)
(7.0%)
HACK*
(13.9%)
(27.2%)
(13.3%)
140
130
120
110
100
+0%
-4%
-7%
90
80
Jan-15
-13%
-16%
Feb-15
Mar-15
Apr-15
May-15
High Growth Security
Jun-15
Jul-15
Low Growth Security
Source: Capital IQ, market data as of January 19, 2016.
* PureFunds ISE Cybersecurity ETF.
45 Aug-15
S&P 500
Sep-15
NASDAQ
Oct-15
HACK
Nov-15
Dec-15
Trading Multiples: High Growth & Low Growth
Valuation Multiples For High Growth & Low Growth Security Companies.
High Growth Security*
Low Growth Security*
(Current: EV / LTM Revenue Multiples)
(Current: EV / Revenue Multiples)
12.2x
8.4x
8.9x
9.0x
7.8x
6.8x
Median: 5.9x
3.4x
3.9x
4.7x
5.0x
1.9x
Imprivata
Median: 2.2x
1.3x
1.3x
FireEye
Fortinet
Rapid7
Qualys
Imperva
CyberArk Proofpoint
Splunk
Palo Alto
Networks
Barracuda MobileIron
Source: Capital IQ, market data as of January 19, 2016.
* High Growth represented by companies with >20% revenue CAGR; Low Growth represented by companies with <20% revenue CAGR.
46 1.7x
VDSI
1.8x
1.8x
F-Secure
Symantec
3.5x
3.8x
Mimecast
Sophos
4.3x
2.5x
AVG
Trend
Micro
Check Point
Severe Decline In Correlation Of Value To Growth
Over The Past Three Quarters The Market Has Devalued Growth In Favor of Profitability & Predictability (Back to Basics).
Valuation Decline Q3 to Q4
High Growth Low Growth
EV / Rev Multiple
-21%
-13%
Market Cap
-44%
-35%
EV / Revenue 2016E
Note: Stats denotes impact to all companies as a group.
10.0x
9.0x
Check Point $13,730 mn
8.0x
Q4: 29.2%
Q3: 63.2%
Q2: 68.4%
Q1: 79.9%
FireEye (Q3)
$4,961 mn
Splunk
$6,284 mn
7.0x
Proofpoint
$2,274 mn
6.0x
Imperva
$1,699 mn
Qualys $957 mn
5.0x
Trend Micro $5,461mn
4.0x
AVG
$917 mn
3.0x
Mimecast
$417 mn
2.0x
VDSI
$602 mn
Rapid7 (Q3)
$847 mn
Significantly
Impacted
R2 By Quarter
F-secure
$406 mn
1.0x
Barracuda
$536 mn
MobileIron $292 mn
Imprivata
$269 mn
Palo Alto Networks
$12,821 mn
CyberArk
$1,467 mn
Rapid7
$593 mn
FireEye $2,445 mn
Fortinet
$4,558 mn
Most
Impacted
0.0x
-10%
-5%
0%
5%
10%
15%
20%
2015-16E Revenue Growth
High Growth Security
Note: Size of the bubble indicates Market Cap. In USD; Market data as of January 19, 2016.
Source: Capital IQ.
47 Low Growth Security
25%
30%
35%
40%
Public Company Trading Analysis
High Growth & Low Growth Security.
Company Name
Stock Price
High Growth Security (>20% CAGR)
149.24
Palo Alto Networks
48.45
Splunk
26.46
Fortinet
15.23
FireEye
56.30
Proofpoint
54.07
Imperva
46.34
CyberArk
28.00
Qualys
14.26
Rapid7*
10.74
Imprivata
LTM Price
Performance
19.4%
(12.4%)
(14.4%)
(53.7%)
15.7%
20.3%
26.4%
(25.5%)
(10.9%)
(28.2%)
Market Cap
($M)
12,821
6,284
4,558
2,445
2,274
1,699
1,467
957
593
269
Enterprise Value
2014-15E
2015E-16E
($M)
Revenue Growth Revenue Growth
12,552
5,336
3,650
1,973
2,198
1,446
1,217
783
469
217
Mean
Median
Low Growth Security (<20% CAGR)
75.92
Check Point Software
19.03
Symantec
40.01
Trend Micro
3.41
Sophos*
17.52
AVG Technologies
10.09
Barracuda Networks
15.20
VDSI
7.72
Mimecast*
2.61
F-Secure
3.64
MobileIron
(6.1%)
(25.8%)
49.0%
(3.6%)
(10.7%)
(71.6%)
(33.0%)
(22.8%)
3.2%
(61.0%)
13,730
12,855
5,461
1,539
917
536
602
417
406
292
12,431
11,238
4,402
1,755
1,038
386
418
452
318
194
Mean
Median
EV / Revenue
LTM
EV / EBITDA
CY2015
CY2016
LTM
P/E
CY2015
CY2016
CY2016
53.4%
44.5%
31.0%
46.6%
34.9%
40.0%
48.8%
23.1%
39.9%
21.8%
35.3%
31.3%
23.7%
30.7%
29.9%
26.3%
32.2%
22.9%
28.5%
20.1%
12.2x
9.0x
3.9x
3.4x
8.9x
6.8x
8.4x
5.0x
4.7x
1.9x
11.1x
8.2x
3.6x
3.2x
8.3x
6.3x
7.9x
4.8x
4.4x
1.8x
8.2x
6.2x
2.9x
2.4x
6.4x
5.0x
6.0x
3.9x
3.4x
1.5x
NM
NM
25.2x
NM
NM
NM
32.6x
15.4x
NM
NM
60.3x
NM
22.4x
NM
NM
NM
31.4x
14.4x
NM
NM
32.9x
NM
17.5x
NM
NM
NM
26.6x
12.0x
NM
NM
66.5x
NM
39.0x
NM
NM
NM
49.7x
34.5x
NM
NM
38.4%
39.9%
28.1%
29.2%
6.4x
5.9x
6.0x
5.5x
4.6x
4.4x
24.4x
25.2x
32.1x
26.9x
22.3x
22.1x
47.4x
44.3x
8.9%
(17.6%)
7.0%
NA
14.1%
27.3%
19.1%
NA
(14.4%)
10.8%
7.9%
(33.3%)
20.4%
NA
4.4%
11.7%
(3.6%)
18.1%
6.3%
16.8%
7.8x
1.8x
4.3x
3.8x
2.5x
1.3x
1.7x
3.5x
1.8x
1.3x
7.6x
2.1x
4.3x
NA
2.4x
1.1x
1.7x
3.4x
2.0x
1.3x
7.1x
3.1x
3.6x
3.5x
2.3x
1.0x
1.8x
2.9x
1.9x
1.1x
13.6x
5.7x
12.6x
29.4x
7.7x
12.7x
6.9x
20.9x
10.6x
NM
13.3x
6.4x
12.9x
NA
6.7x
7.0x
7.0x
28.6x
10.3x
NM
12.4x
8.6x
10.9x
22.5x
6.6x
3.6x
8.4x
50.2x
9.9x
NM
16.7x
17.5x
27.7x
45.5x
9.2x
20.4x
14.2x
NM
20.8x
NM
6.9%
9.8%
5.4%
7.9%
3.0x
2.2x
2.9x
2.1x
2.8x
2.6x
13.3x
12.6x
11.5x
8.6x
14.8x
9.9x
21.5x
18.9x
Note: NM – Not Meaningful, NA – Not Available; market data as of January 19, 2016; * price performance from IPO price.
Source: Capital IQ.
48 15 Advise.
Network.
Invest.
Momentum Partners, LLC
340 Brannan Street | Suite 501
San Francisco, California 94107
Michael Tedesco
Executive Chairman
michael@wellspring.partners
Eric McAlpine
Managing Partner
eric@momentum.partners
Keith Skirbe
Director
keith@momentum.partners
*Securities offered through Financial Telesis Inc. Member FINRA/SIPC.
Dino Boukouris
Director
dino@momentum.partners

Cybersecurity Market Review

Transcription

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