Even in a volatile economic year, dealmaking in the cybersecurity sector continues to be robust. One of the largest cybersecurity deals this year involved RSA Security, which was carved out of Dell EMC at a transaction price of $2 billion.
More recently, SentinelOne raised $267 million in its Series F financing that was led by Tiger Global Management. The deal put the company’s valuation at an estimated $2.73 billion, according to PitchBook.
Cybersecurity represents 8% of spending on software as a service (SaaS), according to International Data Corporation. But the pandemic has provided tailwinds for the industry. Many employees and security administrators continue to work from home. At the same time, the number of devices used to enter company networks has soared, heightening the risk to networks. As a result, we expect increased spending on cloud security solutions.
The opportunity is significant. Bloomberg estimates that only 20% of the security market has been captured by SaaS providers. Leaders in the industry include Crowdstrike, the endpoint security provider that had one of the best initial public offerings of 2019. We anticipate that SaaS security providers will continue on this path into next year.
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