Analysis: cybersecurity companies across the globe have raised $8.1B in 2020 and nearly $6.3B in the US, up from $7.4B globally and $4.7B in the US in 2019
Despite a pandemic that raged around the globe for the better part of the year, the cybersecurity market retained investor interest …
Context & Ripple Effects
This year-end tally closes the pandemic year on an unexpected up note: cybersecurity funding rose to $8.1B globally and nearly $6.3B in the US, up from $7.4B and $4.7B in 2019 — with the US share climbing to roughly three-quarters of the total. The related coverage shows what came next: the acceleration did not stop at year-end.
Within six months, private funding hit $9B in H1 2021 alone, more than double H1 2020 and already eclipsing 2020's full-year record — making this article the baseline of a boom that peaked before it was fully tallied.
First-order effects
- US-based cybersecurity founders and investors capture the bulk of the 2020 gain, with US funding up roughly $1.6B year over year while global growth added only about $700B less than the US increase implies — meaning most of the sector's momentum is concentrating in American startups.
- Cybersecurity startups entering 2021 face a funding environment that is expanding, not contracting, despite the pandemic — the opposite of what most 2020 sectors experienced.
Second-order effects
- The 2020 acceleration pulls capital forward: by mid-2021, H1 funding alone exceeds the full 2020 total, forcing later-stage investors to compete on valuation in a sector they had sized on 2019-2020 benchmarks.
- The record-setting 2021 peak — $22.8B — sets up the sector's subsequent correction, as the 2022 pullback to $15.3B and the 2023 slide to $8.2B, the lowest since 2018 reprice the category back toward its pre-boom baseline.
Third-order effects
- If the pattern holds, cybersecurity proves to be a boom-bust funding category rather than a defensive one: the 2020 pandemic-era gain and the 2021 spike both fully mean-revert by 2023, leaving annual funding near 2018 levels and concentrating capital in fewer, larger deals — Q3 2023 saw only five rounds above $75M across 153 deals.
The trend: Cybersecurity venture funding runs in sharp cycles — pandemic resilience, a 2021 peak at nearly triple 2020's total, then a three-year slide back to pre-boom levels — making 2020's $8.1B the inflection point rather than the new normal.