It’s a lucrative time to be a security company.
These companies’ public market valuations increased 45 percent during the third quarter of 2017, compared to June 2016 lows. This, according to Momentum Partners’ Cyber Security Market Review, which says public security companies saw a median revenue increase of 4.3x over the past 12 months.
High-growth security companies were up 9 percent during the quarter, but even low-growth companies’ revenues increased by 8 percent. Comparatively, the NASDAQ was up 6 percent and the S&P 500 grew 4 percent during this period.
SecureWorks, a Dell Technologies brand, saw the most growth (33 percent), followed by Sophos (28 percent) and Qualys (27 percent). Meanwhile, MobileIron dropped 39 percent during the quarter and CyberArk fell 18 percent.
Venture capital firms continued to throw money at security startups during the third quarter, which saw a continued increase in funding both by dollar amounts and transactions. Investment activity totaled $1.4 billion across 76 transactions, according to the report. This represents the second largest funding quarter by number of transactions since the third quarter of 2016, which saw 80 such deals. It’s also the third largest quarter by dollar volume since the first quarter of 2016 ($1.7 billion invested).
Looking ahead to the fourth quarter of 2017 and into 2018, cloud security will become a top priority, according to the report, which cites Gartner’s Top Cybersecurity Trends. Additionally, expect to see a shift in focus from protection and prevention to detection and response, and DevOps transitioning to DevSecOps, with a focus on security.