Trident Capital Cybersecurity has raised $300 million to invest in new technology companies tackling security threats around the internet of things, payment technologies, identity management, privacy and data management.
The new fund, launched by the longtime mid-to-late-stage investment firm Trident Capital, shows how much investors are willing to spend to secure the technologies on which we depend.
Security spending is expected to top $81.6 billion in 2017, according to data from the technology consulting firm Gartner, and is growing at roughly 10% per year.
For firms like Trident Capital Cybersecurity, that figure represents an opportunity to finance startup companies pitching technologies that can plug emerging holes as businesses embrace the latest technologies.
The buzzwords are years old at this point: cloud computing, internet of things, artificial intelligence, and the “darkweb”. But behind each jargon-filled press release and announcement are real threats to real people’s data (and even an electoral process).
For Trident Capital Cybersecurity, that demand has netted the firm’s co-founders Alberto Yepez and Don Dixon $300 million in cash to finance new companies.
The pair worked together at the Cybersecurity fund’s predecessor, Trident Capital, and have targeted the security space exclusively because the demand is so great.
“We started off trying to raise $150 million on a cap of $200 million and we blew through that one and raised $300 million,” says Dixon.
To round out the team managing all of that money, Dixon and Yepez brought on Sean Cunningham from Intel Capital — a security expert who has co-invested with the two Trident investors when he was working at Intel.
“Together the three of us have done 30 cyber investments and we’ve gotten 6.3x on the exits,” says Dixon.
As for the opportunity, thankfully for investors and tech companies, the problem of security is never-ending.
“The problem has to be resolved again and again,” says Yepez. “The attack surface is real and the adversaries are more sophisticated and well-funded and it’s easier to do this with very little money,” says Yepez.
Although the fund has only just closed, Yepez, Cunningham, and Dixon have already made five investments.
Investments include 4iQ, which touts its abilities to provide risk assessments for small and medium-sized businesses; Appthority, a security technology that manages and monitors smartphone apps; Bayshore Networks, which provides network security for industrial machines; ID Experts, an identity management software developer; and IronNet Cybersecurity (whose website contains so much jargon I can’t make heads or tails of it).
“Cybersecurity is a phenomenal investment area because companies need to fight back against hackers that are already inside the perimeter,” said Dixon, in a statement. “Moreover, unlike most enterprise software, continually enhanced solutions are required because aggressors are always changing their tactics.”