Lower Middle Market Cybersecurity Funding Activity
(In Billions of USD)
152
144
135
129
108
103
102
$4.4
99
95
87
$3.9
$3.6
78
78
75
$3.4
72
$2.8
$2.5
$2.4
$2.4
$2.4
$2.3
$2.0
$1.8
$1.6
$1.6
2021 Q3 2021 Q4 2022 Q1
2022 Q2 2022 Q3 2022 Q4 2023 Q1
2023 Q2 2023 Q3 2023 Q4 2024 Q1
2024 Q2 2024 Q3 2024 Q4
Total Deal Size in ($B)
Deal Count
• In 2024, cybersecurity vendors in the lower middle market raised ~$8.3bn in over 300 transactions. • Late-stage rounds remain steady, and VC funding in H2 2024 rebounded from the low point in Q2 2023, when cybersecurity startups raised just under $1.6 billion. Seed funding also continued to dominate in H2 2024, reflecting strong early-stage support.
• The lower middle market represented a significant number of fundraises in 2024 – While the deal count was 10.9% lesser than 2023, the amount raised was only lesser by 0.2%, indicating a shift towards larger sized deals in this segment. – Later stage VC deals held the largest share - 37.3% of the total number of fundraises with 49.6% of the total funding value. – PE-based fundraises represented a modest 7.0% of the total deal count.
Source: Pitchbook as of December 31, 2024. Note: This includes only equity-based funding deals in the lower middle market ($5M to $150M) that had a disclosed deal value.
20
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