Many Cyber Security Startups are Failing

2017 was the year that had a lot of hacking headlines. The Equifax outbreak was one of the most critical ones. These cyber-attacks deterred many security startups. The timing of the situation is strange as the amount of cyber attacks should pave the way for many cyber security startups (Cyber security start-ups fall on hard times). Some of the reasons are that they are struggling against advanced hackers along with bigger companies developing same technology (Cybersecurity Startups Struggle). In the crowded market, a lot of them are failing to live up on their promises on how good the security is. The situation was very uncommon that David Cowman, a partner at Bessemer Venture Partners, mentioned that he has never seen such a fast-growing market with so many companies on the losing side. The cyber security industry is driven on the belief that there is no end in sight to cyber attacks or companies’ need to protect themselves (Baker).

Even then, only a handful of startups succeeded. The failed startups have become “corporate zombies” due to their inability of fetching a good price in an initial public offering or becoming acquisition targets according to some experts. These startups failed also because their inability to adapt to the evolving technology behind cyber attacks. Some companies tackle this problem by consolidating their security work, using just a few large players rather than spreading business around (Baker). This also saves money and a lot of trouble.

-Anil Adharapurapu

Sources:

https://www.pymnts.com/startups/2018/cybersecurity-startups-ipo-cybercrime-cyberattacks/

https://www.itnews.com.au/news/cyber-security-start-ups-fall-on-hard-times-481445

https://www.reuters.com/article/us-cybersecurity-startups-analysis/under-threat-cyber-security-startups-fall-on-harder-times-idUSKBN1F62RW