WELCOME TO THE CYBER 60, SECOND EDITION
At Lightspeed, we’ve been investing in enterprise founders for over 25 years. Cybersecurity investing is one of the pillars of our global enterprise practice, and a focus area of deep immersion and commitment.
We’re also releasing our second annual CISO survey, conducted this year with the world’s leading industry research firm, Wakefield Research. Wakefield surveyed 200 CISOs at companies with $500 million or more in revenue on their top priorities in cybersecurity.
The results point to a resilient and growing demand for cybersecurity solutions: most CISOs are anticipating greater reliance on cyber vendors and contractors over the next 12 months. And a supermajority told us that AI will impact their decision making when choosing their next cybersecurity vendor.
Lightspeed is proud to build with several of the companies recognized in this report. We congratulate every company in the 2024-25 Cyber 60 for their contributions to safeguarding our world.
Introduction
The global cost of cybercrime, according to the data firm Statista, will reach $13.82 trillion by 2028 — roughly 10% of the predicted global GDP. The staggering costs tell us that as criminals deploy cutting edge technology in their attacks, enterprises must have a strategy of continuous upgrades, enhancements, and vigilance, if they hope to mitigate them.
That’s why Lightspeed remains bullish on cybersecurity. Gartner’s most recent sector outlook report calls for sector growth of 13.4% this year, as information security remains the top technology investment in its 2024 CIO and Technology Executive Survey.
Last year, we wrote that we remain in the early days of the fight to defend the global technology infrastructure from bad actors. This remains true, however we are seeing that the savviest, most hardened enterprises are more deeply integrating cybersecurity initiatives into their business practices. Startups that provide solutions that can respond to this “shift left” transformation today are the ones that stand the best chance of becoming the household names of the industry tomorrow.
WHERE GROWTH COMES FROM IN CYBER
Lightspeed’s three-pronged view of the industry’s growth vectors, derived from research, conversations with industry experts and the experiences of the Founders and companies that we are building with, remains intact:
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1.
SECURITY SPENDING IS OUTPACING OVERALL IT SPEND, AND ACCELERATING
Gartner projects an 11.7% CAGR for Information Security investment between now and 2028, an increase from its previous estimates.
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VENDOR CONSOLIDATION REMAINS A MARKET OPPORTUNITY
Fifty percent of CISOs in our Wakefield Research survey say vendor consolidation is a top priority for the next year. Lightspeed believes that this represents a cyclical opportunity for nimble startups to show value, by filling in the gaps created by consolidation.
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3.
ATTACK COMPLEXITY CONTINUES TO INCREASE
AI is a double-edged sword. AI-powered solutions have become a key part of every CISOs toolkit, but also represent new vectors of attack. There is also the emergent need of defending the enterprise’s AI initiatives, including prompt injection and other attempts to compromise or exploit the AI stack. In addition, projects like cloud transformation continue to increase attack surface area, while state-sponsored cyber attacks make headlines and cause chaos in critical infrastructure.
You can’t advance technology without advancing cybersecurity - cyber startups are critical in pushing the industry forward!Guru Chahal Lightspeed Partner. Enterprise.
IT’S CYBERSECURITY’S MOMENT
AI has captured the public’s imagination, but some of the most important technological developments have come in the cybersecurity sphere.
Crowdstrike’s July outage highlighted the need for cyber resilience strategies;
Germany’s government says
SOLUTIONS THAT ARE ENABLED TO BOTH PROTECT AI SYSTEMS AND DEFEND AGAINST AI ATTACKS ARE THE PLATFORMS OF THE FUTURE.Arif Janmohamed Lightspeed Partner. Enterprise.
CISO Survey: Top Priorities in Cybersecurity
Lightspeed commissioned industry leader Wakefield Research to survey 200 CISOs to understand trends in the market, areas of growth and opportunity, and the transformative impact of technologies like cloud and AI.
The results show that cybersecurity remains a haven for innovation, and that the generational opportunity to build enduring companies remains intact.
In our study with Wakefield Research:
of CISOs said their organizations were increasing cybersecurity budgets this year.
of CISOs said vendor consolidation is a top priority for their organization over the next year.
The average number of cybersecurity products or solutions CISOs in our study are currently employing.
of CISOs say AI will have an impact on their vendor choices for cybersecurity over the next year.
Cyber threats have grown exponentially in both volume and sophistication over the past decade, and AI exacerbates that risk. Building new cyber startups to tackle the growing threat landscape has never been more important.Arsham Memerzadeh Lightspeed partner. Enterprise.
WHAT CISOs WANT
Based on data from the Wakefield Research study conducted for Lightspeed, these eight sub sectors of cybersecurity continue to hold promise for future growth and startup and investment activity.
Each figure below indicates the percentage of CISOs who view spending on the area as important:
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1IDENTITY ACCESS
MANAGEMENT -
2CLOUD
INFRASTRUCTURE -
3APPLICATION
SECURITY -
4DATA
SECURITY -
5ZERO
TRUST -
6INSURANCE/
RESILIENCE -
7SECURING AI
APPLICATIONS -
8SECURING AI
INFRASTRUCTURE
Management
of CISOs in our survey said cloud infrastructure was very important among their spending priorities this year.
IAM is forecast at $16.6 billion in 2023, growing at 15.7% in 2023 and at a five-year CAGR of 11.6%.
Infrastructure
of CISOs in our survey said cloud infrastructure was very important among their spending priorities this year.
Cloud security is forecast at $5.8 billion in 2023, growing at 24.9% in 2023 and at a five-year CAGR of 22.5%.
SECURITY
of CISOs in our survey indicated application security as a very important spending priority this year.
Application security is forecast at $5.9 billion in 2023, growing at 14.6% in 2023 and at a five-year CAGR of 13.6%.
Security
of CISOs in our survey said data security was a very important or important spending priority in their upcoming budget cycle.
Data privacy is forecast at $1.4 billion in 2023, growing at 17.7% in 2023 and at a five-year CAGR of 17.5%.
Trust
of CISOs in our survey said Zero Trust was an important spending priority in their upcoming budget cycle.
ZTNA is forecast at $1.5 billion in 2023, growing at 50.0% in 2023 and at a five-year CAGR of 31.1%.
“ZTNA is growing rapidly, and our forecast was recently increased.”
Resilience
of CISOs in our survey said insurance/resilience was an important spending priority in their upcoming budget cycle.
Cyber Insurance is projected to grow from $10.3 billion in 2023 to $17.6 billion by 2028, at a CAGR of 11.4%.
APPLICATIONS
of CISOs in our survey said implementing AI tools was an important strategic priority over the next 1-2 years
Lightspeed partner. Enterprise.The potential for founders to build AI-native SECURITY solutions is perhaps the single greatest cyber opportunity of this ERA.
INFRASTRUCTURE
of CISOs in our survey are concerned about AI/ML powered attacks
Only 34% of Organizations are already using or implementing AI Application Security Tools
CYBERSECURITY LEADERS MUST BE ABLE TO MEET THEIR CUSTOMERS WHEREVER THEIR ORGANIZATION IS MOST VULNERABLE.Anoushka Vaswani Lightspeed partner. Enterprise.
HOW BUILDERS CAN RESPOND
CISOs are responsible for securing three distinct areas of business operations and additionally responding to the Cambrian explosion of AI across the enterprise. Here then, are the four areas where startups can strategize an approach to win them as customers:
- The transition to cloud is an opportunity for innovation.
- The need to secure legacy, on-prem systems will not disappear soon.
- Application and developer security are constantly evolving.
ALLOWED ACCESS
- IAM is rapidly growing.
- PAM is becoming required by cybersecurity insurers.
- By 2027, 75% of employees will acquire, modify or create technology outside IT’s visibility — up from 41% in 2022, according to Gartner.
CISOs Say
Wakefield asked CISOs what kinds of new tools they were looking for in the marketplace. Here are some of their most compelling answers:
“AI-driven systems that can automatically isolate infected systems and prevent lateral movement.”
“Advanced capabilities for integrating and analyzing data from multiple sources and platforms.”
“Advanced AI-Powered Threat Detection: More sophisticated AI-driven solutions that can predict and identify zero-day threats and sophisticated attacks with greater accuracy.”
“Tools that integrate threat intelligence across all types of data sources and provide actionable insights in a more automated and streamlined way.”
“We need a unified security management tool for multi-cloud environments that works seamlessly across AWS, Azure, and Google Cloud, providing consistent security policies and monitoring.”
Founders seeking to compete with incumbents would be wise to take note as they build their companies and search for product-market fit.
THE AI IMPERATIVE
AI’s influence as a transformational technology is just beginning. Over time, AI will dominate cybersecurity as the fundamental technology to build with, securely manage, and, of course, defend against.
Are you a builder using AI? Email cyber60@lsvp.com to learn more about working with Lightspeed.
THE CYBER 60: THE TOP VENTURE-BACKED CYBERSECURITY STARTUPS
Lightspeed is proud to present the top 60 venture-backed cybersecurity companies in the market today with our partner, FORTUNE.
These companies are led by visionaries; some are founders on the third startup, and some are striking out on their own for the first time. Some companies are generating hundreds of millions of dollars in revenue and some are pioneering new solutions that will become the platforms and technology standards of tomorrow.
We’re proud to recognize the Cyber 60 winners for 2024.
When Lightspeed is an investor in a Cyber 60 company, it is noted with a Lightspeed lettermark. Companies recognized for the second year in a row have a 2x on their entry.
EARLY STAGE
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2x -
2x -
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2x -
2x -
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2x
Honorable Mention: Dropzone
EARLY GROWTH STAGE
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2x -
2x -
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2x -
2x -
2x -
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2x -
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2x -
2x -
2x -
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2x
Honorable Mentions: Lumos, Sublime, Material Security
GROWTH STAGE
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2x -
2x -
2x -
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2x -
2x -
2x -
2x -
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2x -
2x -
2x -
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Honorable Mentions: Claroty, Cyera, Illumio, Security Scorecard, Forward Networks
METHODOLOGY
The Lightspeed Survey was conducted by Wakefield Research among 200 US CISOs at companies with a minimum of $500M in annual revenue, between July 24th and August 1st, 2024, using an email invitation and an online survey.
Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. For the interviews conducted in this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 6.9 percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample.
The FORTUNE Cyber 60 is a listing of the most important venture-backed startups that have not had an IPO, acquisition, or other significant exit event.
The list is alphabetized into groups of 20 by stage: early stage companies, early growth stage companies, and growth stage companies.
To construct the 2024-25 Cyber 60 list, Lightspeed requested data from over 500 cybersecurity startups and performed an initial sort by ARR and current and prior year growth rate.
Lightspeed then validated the accuracy of the self-reported data and reviewed the business operations of each company for inclusion. Lightspeed partners also nominated companies for consideration based on proprietary research including consultation with our CISO network, and analysis of the cybersecurity market landscape. No company was added or removed from the list for any reason except those listed above.
About Lightspeed
SERVING THE BOLD BUILDERS OF THE FUTURE.
For over twenty years Lightspeed has been the first investor and an early backer of some of the most innovative companies in the world, dedicated to serving bold Founders with big ideas.
We stand behind our Founders with high conviction, from Seed to Series F and beyond. We pursue opportunities based on their merits, regardless of where the Founder resides, because the future is global and so are we, with offices in 13 locations across 7 countries, comprising one Lightspeed community.
Visit us at LSVP.COM to learn more.
