Hot funding climate for cybersecurity companies in 2015

If you follow the venture scene these days, then you know there’s barely a week that goes by without a hot cybersecurity startup getting funded by the VCs.

Five years ago the cybersecurity market was lukewarm and highly speculative for investors – before an onslaught of high profile cyber attacks led to billions of dollars in losses each of the past few years.

VC investments into cybersecurity firms five years ago were commonly in the single-digits (seven figures) of millions of dollars each. But now the cyber space has heated up and the startup money often has another zero (or two) at end of it.

[ ALSO ON CSO: Investors pour billions in to cybersecurity firms ]

Three venture capital firms – Allegis Capital, Trident Cybersecurity, and Evolution Equity Partners – have each raised $100 million plus investment funds focused on cybersecurity. But to put that in perspective, it is merely a tiny percentage of the expected deal flow over the next two years. In just the past two years alone investors have put $4.6 billion into cybersecurity startups, according to CB Insights.

Here’s a look at five diverse cybersecurity players who received between $10 million and $250 million each in funding this year.

Tenable Network Security, one of the leading global providers of next-generation cyber security software, recently announced a $250 million Series B funding round led by Insight Venture Partners and Accel. The investment, which is subject to customary closing adjustments, marks one of the largest fundraising rounds completed for a private security company and is expected to accelerate Tenable’s long-term global growth. The funding marks $300 million in capital raised to-date, following Accel’s $50 million Series A investment in September 2012.

CrowdStrike, a provider of the first true Software-as-a Service (SaaS) based next-generation endpoint protection platform, announced in July that the company had completed a $100 million Series C financing round, led by Google Capital. Rackspace, a CrowdStrike customer, also participated in the round along with existing investors Accel and Warburg Pincus. This brought the company’s total funding raised to $156 million.

Checkmarx, a global leader in software application security, announced in June a $84 million investment from venture capital and private equity firm, Insight Venture Partners. The new round of capital will be primarily used to further accelerate growth through product innovation and global expansion.

Recorded Future, a provider of a threat intelligence analytics platform, raised $12 million in Series D round of financing in April. The round was led by Reed Elsevier Ventures, with participation from MassMutual Ventures, the corporate venture capital arm of Massachusetts Mutual Life Insurance Company, and existing investors, Google Ventures, In-Q-Tel, Atlas, IA Ventures, and Balderton Capital. In conjunction with the funding, Kevin Brown, Reed Elsevier Ventures’ General Partner, will join Recorded Future’s board. The company intends to use the funds to continue to expand operations.

Synack, a security startup that has created a unique enterprise-caliber system to safely crowdsource and manage security testing, announced in February it had raised $25 million in Series B funding co-led by GGV Capital and Icon Ventures (formerly Jafco Ventures). This brought Synack’s total funding amount to more than $34 million raised in less than two years. Existing investors Kleiner Perkins Caufield & Byers (KPCB), Google Ventures, Greylock Partners and Allegis Capital, as well as a few individual investors, also participated in the round.

Stay tuned for a year-end CSO recap on cybersecurity VC funding in 2015, with a more comprehensive list of deals coming at the end of December.