💰 Security, Funded #129 - Tech Layoffs & Tight Belts

Hey there,

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

• 💣️ Layoff Bombs

• 🤖 AI Security is Moving Fast

• 📈 Efficient Growth Be Thy Name

There have been some belt-tightening vibes across the tech and cyber sectors these past few weeks. Since 2024 has started, Okta laid off 400, Proofpoint laid off 280, Orca laid off 60, and Trend Micro laid off 2% of its workforce.

Some of you may work at the companies doing these layoffs, or you may have personally been impacted. It’s not an easy time to be in tech right now, and I feel for everyone who just found themselves in this position over the last few weeks.

This recent bit of gloom with the layoffs is a continuation of the trend we thought was done in 2023. The industry is moving further into the Expense Management Era, where companies are still taking austerity measures to reduce overhead and conserve resources. While somewhat counterintuitive, this will be especially true for those companies that just raised funding or had an M&A event. Terms and expectations are “built different” now. It’s all about efficient growth.

What will that growth look like exactly? No one is really sure, and the companies who are buying cybersecurity products are services are going through the same sorts of measures. I suspect the recent expense friction between cybersecurity buyers and sellers is still not over.

Onward to this week's issue.

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Last issue’s vibe check:
Which cybersecurity company will go IPO first in 2024?
🟨🟨🟨🟨🟨⬜️ 🥷 Synk (35)
🟩🟩🟩🟩🟩🟩 🧙‍♂️ Wiz (41)
🟨⬜️⬜️⬜️⬜️⬜️ 🔮 Other (tell me in comments) (11)
87 Votes

_{*Typo in the poll that I couldn’t fix after publishing - it should have said Snyk, not “Synk”} 🛀 

This was a pretty evenly split poll, but more people believe (or hope 🙏 ) that Wiz is going to be hitting the IPO scene first. This one is a toss-up for me, but I think both companies are very well poised to hit the public markets.

Other companies that people wrote in that are definite contenders are Netskope and Tanium (which have had rumors of IPO for at least the last five years).

📸 YoY Snapshot

A rolling 12-week chart to compare funding and acquisitions each week in a year-over-year (YoY) view between 2023 and 2024.

As this is a new year, this chart will be building over the next 12 weeks and then roll forward.

Funding totals for the first 5 weeks of the year skirted just shy of $1.0B raised, an 11% drop from the same time in 2023.

M&A activity is still plugging along nicely, and the AI Security / Security of AI companies are already starting to make rollup moves (more below).

My prediction here is that we’re going to see consolidations and acquisitions happen a lot faster in the AI Security world than in other categories this year. Things can move a lot faster in this space, just like the broader AI scene we see playing out in tech.

💰 Market Summary

• 10 companies raised $94.4M across 9 unique product categories from 5 countries

• 5 companies were acquired or had a merger event across 5 unique product categories

🧩 Funding By Product Category

• $40.0M for Identity and Access Management (IAM) across 2 deals

• $20.0M for Artificial Intelligence (AI) Security across 2 deals

• $17.8M for Data Security Posture Management (DSPM) across 1 deal

• $7.0M for Third-Party Risk Management across 1 deal

• $6.5M for Application Security Testing (AST) across 1 deal

• $1.9M for Anti-Bot across 1 deal

• $814.2K for Data Protection across 1 deal

• $343.5K for Network Security across 1 deal

• $50.0K for Secure File Sharing across 1 deal

🏢 Funding By Company

• Oasis Security, a United States-based platform for managing the machine identity lifecycle, raised a $35.0M Series A from Sequoia Capital and a $5.0M Seed from Cyberstarts for $40.0M in total funding. (more)

• LightBeam.ai, a United States-based data security posture management (DSPM) platform, raised a $17.8M Series A from Vertex Ventures. (more)

• Aim Security, an Israel-based platform securing the usage of generative AI applications in enterprises, raised a $10.0M Seed from YL Ventures. (more)

• Reken, a United States-based platform protecting against generative AI threats, raised a $10.0M Seed from Greycroft, FPV Ventures. (more)

• Tenchi Security, a Brazil-based third-party cyber risk management platform, raised a $7.0M Venture Round from Accenture Ventures and Banco Bradesco. (more)

• p0, a United States-based application security and resiliency testing platform, raised a $6.5M Seed from Lightspeed Venture Partners. (more)

• ClearTrust, an India-based anti-bot platform focused on fraudulent ad traffic and click spam, raised a $1.9M Seed from Ideaspring Capital. (more)

• Manetu, a United States-based data protection platform focused on secure storage and sharing based on localization requirements, raised a $814.2K Seed. (more)

• ForeScout Technologies, a United States-based suite of network and cloud security tools, raised $343.5K in post-IPO equity.

• Nevermind Encryption, a Singapore-based secure file-sharing platform, raised a $50.0K Seed.

🌎 Funding By Country

• $75.5M for the United States across 7 deals

• $10.0M for Israel across 1 deal

• $7.0M for Brazil across 1 deal

• $1.9M for India across 1 deal

• $50.0K for Singapore across 1 deal

🤝 Mergers & Acquisitions

• Laiyer AI, a Germany-based platform protecting against prompt injection attacks on Large Language Models (LLMs), was acquired by Protect AI for an undisclosed amount. (more)

• NuMSP, a United States-based managed security services provider (MSSP), was acquired by Corporate Technologies for an undisclosed amount. (more)

• Reblaze, an Israel-based web application and API security platform, was acquired by Link11 for an undisclosed amount. (more)

• Runecast Solutions, a United States-based threat and vulnerability management (TVM) platform, was acquired by Dynatrace for an undisclosed amount. (more)

• Slauth.io, an Israel-based platform for evaluating, correcting, and generating secure IAM policies by way of Gen AI, was acquired by Ark Infotech for an undisclosed amount. (more)

📚 Great Reads

• The Margin Crush is Coming in 2024 - Tyler Shields predicts a significant margin decrease for cybersecurity SaaS businesses in 2024 due to rising costs, forcing companies to reduce sales and marketing sizes, rely more on AI, or move towards hybrid or BYOC models to maintain profitability.

• CyberSeed Founders Meetup w/Hamza Fodderwala - Sid Trivedi and Hamza Fodderwala talk about what happened in the public markets in 2023, what security demand will look like in 2024, and what it will take to go IPO in the future.

• Fabric - AI Human Augmentation Framework - My buddy Daniel Miessler posted his incredible open-source GitHub framework called Fabric for augmenting humans using AI. I've been playing around with this a ton for all kinds of life stuff, and it's amazing.

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🧪 Labs

It’s called fashion, sweaty, look it up 💇‍♀️