The sharp increase in funding and mergers-and-acquisition (M&A) activity in the cybersecurity industry over the last year has brought into focus the challenges that organizations can run into when their vendor is acquired by or merges with another company. Specialized, pure-play security companies are being bought by bigger and more generalized technology vendors or by private firms seeking to cash in on the cybersecurity boom.
Data that S&P Global Market Intelligence compiled last November showed there were 151 M&A cybersecurity deals in the first three quarters of 2021 alone compared to 94 over the same period in 2020, 88 in 2019, and 80 in 2018. Many companies secured massive venture capital (VC) investments from private equity firms. Some were acquired outright by these firms. VC firms poured nearly $22 billion into cybersecurity firms last year, which was a record.
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