It appears that investments in cybersecurity companies are showing signs of improvement. After a challenging summer, venture capital funding for security startups saw a modest increase of 12% in the third quarter, according to data from Crunchbase, reaching nearly $1.9 billion compared to $1.7 billion in the previous quarter. While this is still down by 30% annually, it signifies a growing interest in cybersecurity within the venture community.
This renewed interest in cybersecurity startups could be attributed to the growing budgets allocated by enterprises for their security needs. According to a report by IANS Research, corporate IT security budgets have grown by 6% from 2022 to 2023, primarily driven by increased risks and the ongoing digital transformation of legacy applications, products, and services.
One notable beneficiary of this trend is Censys, a company that provides insights about critical internet-connected infrastructure. Censys recently announced a successful Series C funding round of $50 million and an additional $25 million in debt financing, bringing their total funding to $128.1 million. The funding round was led by Decibel Partners and included participation from GV, Greylock, Intel Capital, Ascension Ventures, Four Rivers Partners V, L.P., and accounts managed by Hamilton Lane.
Censys, founded on the basis of the internet scanning program ZMap, has evolved to offer a suite of tools for monitoring internet hosts and services and their security statuses. This includes a database of vulnerable infrastructure enriched with context and a platform for monitoring and analyzing internet-facing assets such as servers and desktops.
The platform is commonly used for threat hunting, the detection and investigation of security compromises, and triaging exploits detected through Censys’ asset monitoring technology. It also helps users understand the impact of their security efforts, including the duration and severity of risks.
Censys aims to provide leaders and their teams with the data and capabilities needed to stay ahead of advanced threat actors, enabling them to track performance over time and generate industry-standard metrics. Recently, Censys introduced a chatbot that allows users to perform searches across its security database in natural language, enhancing user accessibility.
With over 350,000 users on its free service and more than 180 paying customers, including government agencies like the FBI and the Department of Homeland Security, Censys plans to use the recent funding to expand its workforce, aiming to have 150 employees by the end of 2023.
Despite economic uncertainties, the demand for cybersecurity remains strong, especially due to the pandemic’s impact on remote work and cloud solutions. However, Censys and other cybersecurity companies may face challenges, including potential flat or declining venture funding due to issues in Europe, U.S.-China relations, and rising interest rates. Additionally, some investment funds have pulled back from the cybersecurity market over recession and tech market disruption concerns.
On the positive side, a Spiceworks report indicates that most companies plan to increase their year-on-year IT spending, including cybersecurity, in the face of potential economic uncertainty. IDC predicts that global cybersecurity spending will continue to grow, reaching over $219 billion in 2023 and nearly $300 billion in 2026.
