Startup News: Arctic Wolf cites cyberattacks as top business concern, as the cybersecurity sector gains investor interest

Benjamin Franklin famously said that nothing is certain except death and taxes. If he were alive today, he might add “cyberattacks” to the list.

In the past year alone, companies such as Apple, Twitter, Samsung and Doordash have reported being victims of data breaches at their companies. So have government entities including the Texas Department of Insurance and the government of Costa Rica.

According to a recent study conducted by Arctic Wolf, – a privately-held cybersecurity company with a valuation in excess of $4 billion – 63% of 900 senior IT and cybersecurity decision-makers at U.S. companies surveyed said that cyberattacks were their top business concern in 2021. That number has dropped to 36% this year but that’s because the sharp uptick in inflation this year has emerged as a pressing concern.

Clearly, the rise in cyberattacks across the globe has presented opportunities for investors who are betting on companies that fight this scourge. According to a September article in Forbes, the global cybersecurity market was valued at just under $185 billion at year-end 2021.

Due to the lucrative motives of cybercrime, and the higher sophistication with tactics bad characters can impose, startups in the cybersecurity sector are constantly needing to innovate. Lately, much of the investor capital has been focused on cybersecurity firms that employ artificial intelligence technology.

Two similarly sized AI-based cybersecurity unicorns are reaping the benefits of this investment focus.

Last January, for example, SparkCognition, an Austin, Tex. -based private company, closed a $123 million Series D round. Following this round, the company, which has raised $300 million, achieved a valuation in excess of $1.4 billion, according to the company. Founded in 2013, SparkCognition’s AI-powered protection systems combines the power of Big Data with patented machine learning algorithms to predict and prevent cyberattacks.

And in February, Alto, California-based Salt Security closed a $140 million Series D round led by Capital G, the independent growth fund controlled by Google’s parent company Alphabet. The latest investment brings total funding up to $270 million and the company’s valuation up to $1.4 billion, the company said. Founded in 2016, Salt Security offers what is known as an API protection platform to prevent cyberattacks by using artificial intelligence in a continuous and automated manner. API is short for “application program interfaces,’’ which have become critical to programming web-based interactions and have thus become a natural target for hackers.

Meanwhile, other more traditional private cybersecurity companies are also taking advantage of growth in the industry. In November, Arctic Wolf announced that it ranked 161st on the Deloitte Technology Fast 500, a ranking of the 500 fastest growing tech-related companies in North America based on revenues.

The Eden Prairie, Minn.-based company helps clients by providing security operations as a concierge service, with experts working as an extension of an organization’s internal team to provide 24x7 monitoring, detection, and response and ongoing risk management. Since its founding in 2012, Arctic Wolf has raised $900 million and its last known valuation was in excess of $4 billion.