New ICON report predicts record deal activity for cybersecurity sector

Cybersecurity fundraising activity is on track for another record year, according to ICON Corporate Finance’s April 2021 cybersecurity sector report, which reveals that sector valuations have hit historic highs over the past 12 months.

In Q1 2021 USD3.7 billion was invested by VCs globally, an increase of +35 per cent. That looks set to shatter 2020’s record USD8.3 billion (+22 per cent).

The resilience of the market was demonstrated as more than USD22 billion in M&A deal value was transacted,­­­ despite the challenges of a global pandemic
Public cybersecurity stocks have traded at all-time highs, seeing the sector more than double in value since lockdown restrictions began in March 2020.

ICON’s Cybersecurity Sector Index, meanwhile, shows that the sector is now trading at 11x revenues and company is predicting that a wave of cybersecurity businesses are ready to capitalise on the extraordinary market opportunity, boosted by VCs flooding the industry with necessary funding.
Report author Florian Depner, Director of ICON Corporate Finance, explains: “Ninety four per cent of organisations worldwide have suffered a data breach as a result of a cyber-attack in the past 12 months. The Covid-19 pandemic has exacerbated this. Cybersecurity is now a mission-critical business investment category, with a market worth greater than USD150 billion. Investors and acquirers are recognising this trend, and there’s a lot of dry powder ready to be deployed. That means the market is on course to outpace last year’s record funding and M&A activity.” 
Compounding this further, the shift to a digitally transformed enterprise ecosystem, with scattered workforces and online consumers, has put unprecedented pressure on governments to adapt data protection requirements, address data privacy and surveillance issues, and protect critical national infrastructure from cybercrime.
ICON’s report highlights 2021’s hot sectors, and predicts that healthy sector fundamentals, attractive business models and a buoyant public market provide the right ingredients for an exciting deal environment and continued strong growth of the industry.