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  • 💰 Security, Funded #116 - Breaches, Budgets, and Bottom-lines: Cyber's Rollercoaster Ride!

💰 Security, Funded #116 - Breaches, Budgets, and Bottom-lines: Cyber's Rollercoaster Ride!

A deep dive on cybersecurity funding and industry news from the week of October 16th, 2023.

Author

Mike Privette
October 23, 2023 • Reading Time: 12 minutes

Hey there,

Happy Monday, and I hope you had a great weekend. In this week’s issue, we’ve got:

  • 📈 Tapering off in funding volume

  • 🛍️ Slowest week for acquisitions in 2023

  • 🤔 High switching cost and Okta’s 12% haircut

  • 💰️ 15 companies raised funding, 1 company acquired

I’m sure you already know about the latest Okta breach from last week, and as a result, their stock dropped nearly 12% after hours.

I don’t normally cover this side of our industry with so many other great resources covering it better than I could, but when there are stock implications, I think it makes sense to weigh in.

This series of breaches at Okta is especially troubling because a platform like Okta isn't just another cybersecurity tool; it’s an essential business function of modern corporations. A breach at a point of trust like this can have far-reaching implications that go beyond a conventional cybersecurity incident.

Given Okta’s upcoming November 30th earnings call and a recent poll in this newsletter showing that companies rarely switch vendors post-breach, it’s plausible that this dip is a short-term phenomenon. The real key here is the lack of viable market alternatives and the high switching costs, making Okta a likely candidate for recovery despite what it does or does not do.

The company’s future—both in terms of customer trust and share price—will hinge on how effectively it can pivot towards heightened security and transparency up to this next call. This upcoming earnings call could serve as the inflection point that either reinstates market and customer confidence or exacerbates existing concerns.

Onward to this week's issue.

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Vibe Check - Are you giving Okta the boot?

If you are an Okta customer today, are you looking to replace them given all of their breaches and the extremely sensitive position of trust they are in?

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Last week’s poll:

Vibe Check - CISOs
Where are you spending most of your cyber budget? Think about not just software costs but the people and services that support each.

Network / Cloud and Logging / SIEM led last week’s poll, with Access & IAM things coming in 3rd. I had personally expected Logging / SIEM to be the biggest bucket today. Still, many said they were buying more things through the Cloud Service Providers (CSPs), which could account for some of the upward trajectory in Network / Cloud spending. Any way you shake it, these big three areas dominate most cyber budgets today.

🔮 Earnings Reports

A section for notable earnings reports from public cybersecurity companies, be they “pure play” or hybrid companies.

No public earnings calls to report on from last week! 🫡

📅 YTD Funding

A rolling 12-week chart to compare funding and acquisitions each week between 2022 and 2023.

Funding volume and transactions have tapered off a bit over the last four weeks. This timeframe in 2022 was a bit of a mixed bag, with some huge transactions and uncommonly low weeks.

It was a very slow week for acquisitions last week and actually the lowest volume in all of 2023. It is also possible that some transactions are waiting to be announced at a later date for better PR timing, a game that is often played in our industry.

💰 Funding Summary

  • 15 companies raised $252.8M across 12 unique product categories

  • 1 company was acquired or had a merger event across 1 unique product category

🧩 Funding By Product Category

  • $80.0M for Passwordless Authentication across 1 deal

  • $56.5M for Anti-Bot across 3 deals

  • $55.0M for Fraud and Financial Crime Protection across 2 deals

  • $20.0M for Secure Collaboration and Messaging across 1 deal

  • $15.0M for Trust & Safety across 1 deal

  • $7.0M for Artificial Intelligence (AI) Privacy Assurance across 1 deal

  • $6.5M for Professional Services across 1 deal

  • $3.5M for Security and Compliance Automation across 1 deal

  • $3.0M for SaaS Security Posture Management (SSPM) across 1 deal

  • $3.0M for Identity Verification across 1 deal

  • $3.0M for Data Protection across 1 deal

  • $280.2K for Threat Intelligence across 1 deal

🏢 Funding By Company

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🌎 Funding By Country

  • $241.3M for United States across 12 deals

  • $5.5M for United Kingdom across 1 deal

  • $3.0M for France across 1 deal

  • $3.0M for Australia across 1 deal

🤝 Mergers & Acquisitions

This week’s chart kinda makes me lol

📚 Great Reads

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🧪 Labs

🎶 Hi, it’s me. I’m the [vulnerability], it’s me. 🎵 

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