Cybersecurity unicorns projected to reach an all-time high in 2022, data suggests
Global markets, including the technology sector, encountered significant declines in the first half of 2022 due to various macroeconomic challenges. Yet, the cybersecurity software industry continues to produce unicorns at an unprecedented rate. The upsurge of cyberattacks on a global scale creates new addressable markets and opportunities for cybersecurity companies to tackle.
Atlas VPN predicts that if the upward trend’s growth momentum is sustained for the rest of 2022, the total number of new unicorns is well-positioned to reach an all-time high, dwarfing 2021’s 36 unicorns.
The data for the research was extracted from the Progress Partners Market Report for Q2 2022.
In H1 2022, the cybersecurity industry produced 19 companies valued at $1 billion or more. Yet, the figures reveal that the digital defense market began to flourish in early 2021.
The number of cybersecurity unicorns grew from 6 in 2020 to 36 in 2021, representing a 500% increase YoY.
Global shifts towards remote work and online education were the main driving forces behind the market's growth.
When users switched to working and learning from home, they, in turn, created a significantly wider cyberattack surface.
Combined with the fact that at-home cybersecurity practices tend to slip into the background of things, threat actors found this period extremely profitable.
In response to the increase in online fraud and hacking activities, users have begun using cybersecurity software, like VPNs, much more often.
Our market research shows that in 2020, people from 85 selected countries downloaded VPN applications over 277 million times, while in 2021, the number soared to 785 million.
There are other essential cybersecurity tools as well, but the overall trend in the growth of cybersecurity tool use is evident. Furthermore, almost 50% of new companies focus on cybersecurity or storage services.
$1B+ Cybersecurity Exits
Besides valuations, $1B+ cybersecurity exits also reached an all-time high of 18 in 2021, representing a 2x growth over 2020.
In H1 2022, we have already witnessed eight $1B+ exits, and if the trend continues, the total for the year will be on par with 2021.
Moving forward, we will analyze the most notable exists that happened in the second quarter of 2022.
To start, the largest deal was made public on May 26, 2022, when Broadcom, a global technology leader, acquired VMware, a cloud computing and virtualization technology company, for $69 billion.
Secondly, on April 11, 2022, SailPoint, the market leader in enterprise identity security, announced that it had entered into a formal agreement to be bought by Thoma Bravo, a major software investment group, in an all-cash transaction of about $6.9 billion.
The third notable deal involved Datto, a leading global provider of security and cloud-based software solutions purpose-built for Managed Service Providers (MSPs). The cybersecurity firm was acquired by Kaseya for $6.2 billion, with funding led by Insight Partners.
A deal between KKR and Barracuda rounds up the $1B+ acquisition list for Q2 2022. On April 12, 2022, KKR, a leading global investment firm, announced the signing of a definitive agreement by which KKR's investment funds will acquire Barracuda, a well-known provider of cloud-first security solutions, from Thoma Bravo, a leading software investment firm.
All in all, despite the challenging global environment, we are currently witnessing the golden age of the cybersecurity software market. In fact, many companies hope to grow after investing more in cybersecurity. In another study, we discovered that the US, the UK, and Saudi Arabia lead in commitment to cybersecurity.
Atlas VPN predicts that the industry's upward direction will extend not only until the end of 2022 but into 2023 as well.