Cybersecurity spending surges to a two-year peak in Q2 due to significant transactions
In a remarkable turn of events, the cybersecurity sector has witnessed its strongest funding quarter since 2022, with a staggering $4.4 billion raised in Q2 2024. This surge in investment was revealed by data from Crunchbase, which tracks funding rounds for startups specialising in network security, cloud security, and cybersecurity.
The quarter saw more than 10 rounds close at $100 million or more, a significant increase from the 20 such rounds recorded in all of 2023. Notable among these were Wiz, which raised $1 billion at a $12 billion valuation in May, and Island, which closed a $175 million funding round in April.
The funding boom in Q2 2024 also marked a sustained period of growth for the sector, with cyber startups raising a total of $7.1 billion in the first half of 2024. This represents a substantial increase from the $4.7 billion raised in the same period last year.
However, the second quarter of 2024 saw a decline in the number of deals closed compared to the previous quarter, with 153 deals compared to 193 in Q2 2023. Despite this, the funding per deal increased significantly, with venture capitalists investing $4.4 billion into cybersecurity startups during the quarter.
The funding trend for Q2 2024 and Q2 2025 shows a continued growth, with Q2 2025 seeing a total of $4.2 billion raised across 100 funding rounds, a 25% increase year-over-year from $3.4 billion in Q2 2024. This increase was driven by eight rounds exceeding $100 million, accounting for about 55% of total funding.
Among the startups that received significant funding in Q2 2024 were WiseBee and IdentifAI. WiseBee, an AI-driven cybersecurity startup focusing on autonomous cyber threat detection for mid-market companies, raised €2.1 million (approximately $2.3 million) in a pre-seed round led by Frontline Ventures and BrightCap Ventures. IdentifAI, a Milan-based startup developing AI-powered detection technology to identify deepfakes and verify digital content authenticity, raised €5 million (approximately $5.5 million) led by United Ventures.
The strong investor interest and rising average deal sizes in cybersecurity, particularly for AI-enabled solutions targeting niche markets such as mid-market companies and deepfake detection, indicate a positive outlook for the sector in 2024 and 2025.
Sources: 1. TechCrunch 2. Crunchbase News 3. WiseBee Press Release 4. IdentifAI Press Release 5. VentureBeat
- The surge in investment in Q2 2024, as reported by Crunchbase, was primarily directed towards network security, cloud security, and cybersecurity startups, with technology solutions such as AI-driven autonomous threat detection and deepfake detection receiving significant funding.
- As technology advancements continue, it is anticipated that the cybersecurity sector will maintain its growth trajectory, attracting even more funds for AI-enabled solutions in niche markets like mid-market companies and deepfake detection, as evidenced by the funding received by startups like WiseBee and IdentifAI.
