On A quarterly basis I tabulate where the Venture Capital funding is flowing, and sort companies security taxonomies. This is by no means an endorsement of a particular trend or investment however it reveals some very interesting statistics, and surprisingly the total dollar amount invested in Security Startups in Q3 2005 is substantial.
Estimated $315M new Investment in Q3 within the Security portfolio worldwide (34) deals, with the majority of investment $257M within US companies (27) by US VC firms, and (7) international. (18) Deals were primarily early stage (Series A and B) and averaged $8M. Largest deals were Series B for $12M, some highlights Vidient Systems; Hotung Venture Capital and Tizor; Hummer Winblad Venture Partners.
Six Major Breakout Trends;
- Majority (10) investments were focused on $53mm Security Content Management companies (SCM) (consisting of; Delivery, Disposal, Filtering, Security, Digital; Assets/Rights/Signatures; Encryption; PKI).
- Second most active investments $34mm in (8) Identity companies (consisting of; Authentication; Authorization; Biometrics; Access Management; Protection; Single Sign-on; Smartcard; Theft).
- Third (8) investments in Antivirus for $88mm (consisting of; Anti; Cheating; Spyware; Piracy; Spam; Heuristic Attacks; Mobile; Phishing; URL Filtering).
- Fourth (6) investments focused on $54mm Security Event Management (SEM) companies (consisting of: Correlation & Analysis; Forensics; Intrusion Detection & Protection Systems (IDS & IPS); Vulnerability Assessments).
- Fifth, and most interesting (3) investments focused on $52mm in Managed Services (consisting of outsourcing; SCM; Identity; Antivirus; SEM, etc).
- Sixth investments (3) Networking companies $15mm (consisting of; Networking/Anti-Spam/Anti-Virus/Network (IDS – IPD)/VPN/Wireless).
Note worthy investments namely; Girisoft $50mm (retail Antivirus & firewall), WestTec Interactive $20mm (video surveillance), Identrus $20mm (digital identity authentication).
Data calculations derived from Venture One feed as well as referrals from other groups throughout Microsoft and deals captured under the radar scope.
PS. Picture taken by Sam Ramji, of me standing in front of Starbucks in the center of the Forbidden City in Beijing. I got what I needed; Vente Latte & t-shirts for the kids back home.