Gartner has an interesting take on venture funding of cybersecurity companies, recognising that many of them are destined to become, as they term it "cockroaches", surviving largely on consulting revenues. While cybersecurity companies are generally capital efficient, speed of execution is vital for investors to get good returns, as the case with other sectors.
According to Gartner, worldwide information security spending reached $76.9 billion in 2015. As the frequency and intensity of hacks worsen, security spending is expected to reach $170 billion by 2020. That’s more than 100 percent growth in five years. Venture capital (VC) investments in cybersecurity startups continues to grow steadily (~40 percent each year over the past 5 years); 2015 may reach an all-time high, with projections of ~ $3.5 billion.