Firm Overview - Momentum Partners

1

Cybersecurity Market Review Q3 2016 Advisors & Dealmakers In Cybersecurity

Momentum Partners

• Momentum Capital Markets

About Momentum Partners

Momentum Partners Advisors & Dealmakers In Cybersecurity. Why Momentum Partners?

Momentum’s Senior Cybersecurity Team

Momentum Partners is a boutique Cybersecurity focused advisory investment bank based in Silicon Valley with operations globally. We employ a high-touch advisory model specifically designed to serve Founders/CEOs and their Boards – Series A to exit – where we are relentless in our pursuit for better outcomes for our clients. As advisors and dealmakers for two decades, we have closed over 200 deals totaling $200 Billion in value.

Cybersecurity  Enterprise IT  Cloud & SaaS  Defense & Government Mergers & Acquisitions* Corporate Development

 

200+ Deals CLIENT

COUNTERPARTY

Capital Raising*

Founder Strategic and Capital Markets Advisor to CEOs, Founders & Boards

Founder Senior Advisor Cybersecurity Lead

Petros Kitsos Senior Advisor

Timothy Lipton Partner Founder Start-Up Advisor iCFO

Keith Skirbe Director

Ecosystem Development

COUNTERPARTY

Eric McAlpine Managing Partner

Strategic Advisor Direct Investor and Board Member Deep Defense & Aerospace Expertise

Dino Boukouris Director

Strategic Advisor Mergers & Acquisitions Deep Cybersecurity Expertise

$200+ Billion CLIENT

Michael Tedesco Executive Chairman

CLIENT

COUNTERPARTY

CLIENT

COUNTERPARTY

Strategic Advisor Start-up Advisor VC & Private Equity CLIENT

COUNTERPARTY

(Rocketdyne)

3

Executive Summary

Q3 2016: Market Update And Observations The Emergence of Private Equity Firms Have Significantly Increased Strategic Activity In 3Q16. 

Valuations





Exits: M&A & IPO Activity

  

Investment Activity



 

Industry Observations

 

Valuations increased across the board during Q3, driven by our High Growth Cybersecurity comps which were +21%. Our Low Growth Cybersecurity comps were +10%, relative to the NASDAQ which was +10%, the S&P 500 which was +3% and the HACK index which was +17% Valuations have rerated over the last 12 months, but were buoyed by a strong Q3. Median forward multiples are down 34% compared to down 50% at the end of Q2. Notables include Rapid7, FireEye and Fortinet whose forward multiples are down 61%, 55% and 34%, respectively Cybersecurity M&A activity through 3Q16 reached record levels of $14.3B; total announced M&A volume in 3Q16 totaled $7.6B and 31 Deals There were several notable M&A transactions led by PE buyers: Vista Equity acquired Infoblox for $1.3B, TPG acquired McAfee for $4.2B and Thoma Bravo acquired Imprivata for $488M Carbon Black confidentially filed for its IPO with the SEC. Optiv, Tanium, Forescout, Veracode and Tenable Network Security are all eyeing an IPO exit over the next 12 – 18 months Q3 saw an increase in large fundraising rounds – there were 5 deals of $50M+, led by StackPath’s $180M investment from Abry Partners, and 10 deals between $25M-$50M 3Q16 saw funding volume total $1.3B across 80 deals, a record number of deals and the second largest funding volume since 2010; fundraising volume YTD has already exceeded 2015 60% of deals were early stage (Seed – Series A) with a median amount raised of $4.5M; the remainder consisted of late stage (Series B+) with a median amount raised of $20.6M Private Equity ‘s Cybersecurity: 7 deals in the sector in 2016 representing a total of $8.0B in enterprise value have included Private Equity on one side or the other, led by TPG’s acquisition of McAfee from Intel Industrial / IoT security is emerging as one of the next big destinations for investment – we are tracking 16 companies that raised $110M in 2016, with 60% of funds ($70M) raised in 3Q16 alone Security teams are stretched thin and struggling with vender fatigue in many cases. SOC automation and orchestration tools are a welcomed promise if they can deliver on the hype 5

Top 5 Movers in Q3

91%

68% 40%

30%

StackPath

28%

Cybersecurity Dashboard $14.35 Billion

$3.88 Billion

218

Financing Volume YTD

Financing Transactions YTD

Top Financing Transactions YTD Date

Company

1/13/16 7/25/16

Financing Activity

Amount ($M)

$3.9

$3.8

187

StackPath

6/8/16

1/21/16

76

7/5/16

Mar-15

May-15

Jul-15

75

Network Security Messaging Security MSSP

Jan-16

Mar-16

May-16

Jul-16

Sep-16

2015

M&A EV/Rev Multiples

1,254

142

600

97

4.5x

Max 8.6x

1,463

2016 YTD

Volume ($B)

5.9x Median 7.6x

488

Median 5.0x

64 50

2015

2015

2016 YTD

(EV / 2015E)

# of Deals

293 Min 0.9x

2016

2015

(EV / 2016E)

2015

2016 YTD

9 10

13

40

6 4

24

14

11

4

2015 Total: 229

17

23

22

17

2016 Total: 218

21

19 19

6

8 2

16 12

3 27

20

13

2015 Total: 142

14

2016 Total: 97

2 7

5

7

12 16

9 18

M&A Activity

6

10

12

19

5

13

275

2016 YTD

# of Deals

Financing Activity 7 4

Risk & Compliance Industrial / IOT Security

Nov-15

Max 12.9x

218

Data Security

Web Security

Sep-15

Public Comps

229

Cloud Security

Application Security

4,722 4,200

Jan-15

Volume ($B)

Threat Intel / SecOps / IR

Fraud Prevention / Transaction Security

Amount ($M)

5 2016 YTD

Identity & Access Management

Endpoint Security

Acquirer

10

Specialized Threat Analysis & Protection

Mobile Security

Target

$14.3 $10.5

Min 0.9x

8/30/16

Top M&A Transactions YTD

M&A Activity

M&A

25

100 96

Financing

30

15

2015

1/28/16

Monthly Deal Count Pulse

M&A Transactions YTD

20

180

2/3/16

97

M&A Volume YTD

13

10

25

17

21 6

3

5

5

3

15

6 3 1 4

3

Private Equity

’s Cybersecurity

The Highly Fragmented Cybersecurity Market Lends Itself To the PE Platform/Roll-Up Playbook. Recent Cybersecurity PE Activity

Major Cybersecurity PE ‘Platform’ Plays PE Firm

Platform

Add-Ons

($2.4B / NA)

Exit Acquired By

Acquired By

Acquired By

Acquired By

$4.2B

$1.3B

$488M

$1.5B

($4.7B / 7.9x)

None ($971M / 2.7x)

($1.9B / NA)

 Expect these companies and their sponsors to utilized M&A to complement organic growth ($550M / 1.9x)

(NA / NA)

(NA / NA)

(NA / NA)

(NA / NA)

($600M / NA)

Beep Science

Late Stage / Pre-IPO Activity

($890M / 2.0)

($710M / 6.0x)

─

Series A $180M

Series D $100M

Private Equity $96M

Private Equity $187M

Series B $250M

Series G $148M

Series D $110M

Series G $76M

─ ─ ─

 PE/late stage and public/cross-over investors have strong appetite for break-out cybersecurity stories that could exit via an IPO in 12 – 24 months

7

Summary Of Recent Strategic Activity In Cybersecurity Investing Activity Continues To Outpace Exits (M&A + IPO).

9/16: $1.3BM / 3.5x

Selected Acquisition Activity

Selected VC Activity

Equity

(Date: Implied Enterprise Value / LTM Rev Multiple)

(Date: $ Raised / Pre-$ Valuation / Funding Stage)

(Date: $ Raised)

9/16: $4.2B / NA

7/16: $1.5B / 3.4x

9/16: $40M / $300M / D

9/16: $488M /3.7x

8/16: $50M / NA / F

7/16: $64M / NA / C

4/16: IPO: $112M Dell Spinoff

StackPath 6/16: $293M / 10.0x+

6/16: $4.7B / 7.9x

6/16: NA / NA

7/16: $180M / NA / A

6/16: $600M / NA

6/16: $20M / $71M / B

6/16: $20M / NA / B 11/15: IPO: $78M 9/16: Secondary Offering: $66M

2/16: $100M / NA

2/16: $45M / NA

1/16: $10M / NA

1/16: NA / NA

2/16: $30M / NA

1/16: $275M / 6.9x

12/15: $35M / 1.9x

11/15: $78M / NA

6/16: $100M / $900M / D

5/16: $41M / NA / D

4/16: $15M / $52M / B

3/16: $30M / $245M / C

2/16: $23M / NA / B

2/16: $96M / NA / PE

9/12: Series C: $62M 1/10: Series B: $21M 12/08: Series A: $8M

$91M

7/15: IPO: $103M

11/15: $280M / NA

10/15: $453M / NA

10/15: $300M / 1.8x

10/15: $400M / 7.5x

2/16: $14M / NA / B

10/15: $116M / 10.3x

9/15: $290M / NA

9/15: $425M / 2.0x

7/15: $190M / NA

11/15: $20M / $60M / B

1/16: $80M / $511M / C

12/15: $27M / $43M / B

10/15: $33M / NA / A

10/15: $15M / $55M / B

12/14: Series D: $30M 11/11: Series C: $50M 2/10: Series B: $2M 9/08: Series A: $7M

$89M

6/15: IPO: $553M

6/15: $635M / NA

4/15: $200M / 3.3x

4/15: $1.9B / NA

8/15: $52M / $380M / E

4/15: $786M / 3.6x

Source: Capital IQ, 451 Group, Crunchbase, TechCrunch. Momentum Partners maintains a proprietary Cybersecurity M&A deal database.

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7/15: $18M / $34M / B

6/15: $30M / $122M / C

5/02: Minority: $60M 9/98: Venture: $4M

$64M

Cybersecurity IPO Insights Large Private Equity Funds Have Set Their Sights On Underperforming IPOs In The Sector. Implied Multiple On The Day of Pricing For Each Cybersecurity Sector IPO (Multiple: EV / LTM Revenue)

(7/17/16: $1.5B / 3.4x LTM Rev)

(9/19/16: $1.3B / 3.5x LTM Rev)

(7/13/16: $488M / 3.7x LTM Rev)

Three ‘take private’ transactions so far in 2016 as Private Equity continues its love affair. Cybersecurity companies trading at a discount to the sector.

20.5x

13.4x

13.0x

4.4x

3.9x

4.3x

4.0x

5.3x

2012

IPO Timing

4.1x

5.7x

2013

4.6x

5.3x

6.7x 4.0x

4.0x

2015

2014

3.3x

2016

Stock Performance (since IPO)

─

245%

65%

476%

279%

218%

188%*

26%

42%

69%

─

210%

2%

10%

91%

11%

EV / LTM Rev (Current)

─

8.7x

3.4x

9.9x

9.9x

6.3x

6.4x

3.3x

3.5x

1.0x

─

7.6x

4.2x

4.9x

6.3x

2.3x

Total $ Raised

$128M

$230M

$120M

$82M

$260M

$91M

$128M

$304M

$64M

$100M

$75M

$86M

$553M

$103M

$78M

$112M

Source: Capital IQ. Stock performance and valuation multiple as of September 30, 2016.

9

Median: 4.5x

Momentum’s CYBERscapes

CYBERscape: The Cybersecurity Landscape The Security Sector Is Dynamic And Vast. We Are Ceaseless & Vigilant In Our Coverage. Network Security

Endpoint Security

Application Security

Network Firewall

Network Monitoring/Forensics

Endpoint Prevention

WAF & Application Security

Intrusion Prevention Systems

Unified Threat Management

Endpoint Detection & Response

Vulnerability Assessment

Messaging Security

Web Security

Managed Security Service Provider

Risk & Compliance

Security Operations & Incident Response

Mobile Security

Data Security

Identity & Access Management

Cloud Security

SIEM

Threat Intelligence

Industrial / IoT Security

Security Incident Response

Specialized Threat Analysis & Protection

Fraud Prevention / Transaction Security

Source: Momentum Partners.

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CYBERscape: The Investor Landscape Cybersecurity Is A Popular Investing Ground For Institutional Investors Around The World. Corporate Ventures

Cybersecurity-Focused Investors

Government

Pacific Northwest

Canada

California

Europe

New England

United Kingdom

Northern California

Europe (Ex-UK)

New York

Israel

Mid-Atlantic

SECURE OCTANE

APAC Southern California

Mountain Midwest

12

South

1

Momentum’s Watch List: Q3 2016 Selected Private Companies With Tremendous Momentum. Company

Raised: Private Funded HQ: San Francisco, CA

Raised: $35.0M HQ: Palo Alto, CA

Raised: $6.0M HQ: Austin, TX

Company

Commentary  OPSWAT provides an advanced threat detection and prevention platform to protect organizations from zero-day attacks. Metadefender leverages 100+ anti-malware, data sanitization, vulnerability and other security engines to protect organizations from known and unknown threats. Use cases include threat detection & prevention, email & proxy threat prevention and endpoint forensics & posture assessment. Its solutions are deployed by 1000+ enterprises & 50+ OEM customers to more than 200M endpoints  Leadership: Benny Czarny (CEO), Tom Mullen (SVP, Bus Dev), Patrick Tan (CFO)

Raised: $7.0M HQ: Sunnyvale, CA

 Vera is a next-gen data security company that enables businesses of all sizes to secure, track, and share any kind of data – from Office files to video, no matter where it’s stored or how it’s shared – email, Box, Dropbox or local file shares. With robust policy enforcement, strong encryption, and strict access controls, Vera’s Dynamic Data Protection lets employees collaborate freely while ensuring the highest level of security, visibility and control  Leadership: Ajay Arora (CEO), Prakash Linga (CTO), Robin Daniels (CMO)

Raised: $32.5M HQ: Portland, OR

 SparkCognition is the leading Cognitive Security Analytics company developing patented products that detect behavioral anomalies in streaming data sets from both industrial sensors and IT/OT networks. SparkSecure applies automated model building, Cognitive Fingerprinting (patented) and natural language processing to automatically detect, prioritize, assess, and remediate a wide range of the most advanced cyber threats. DeepArmor™ is the first cognitive antivirus solution to the market  Leadership: Amir Husain (CEO), Randy Printz (COO)

Raised: $29.6M HQ: Boston, MA

 Onapsis is the pioneer in cybersecurity and compliance solutions for cloud and on-premise ERP and business-critical applications. Onapsis Security Platform is the most widely-used SAP-certified cybersecurity solution that delivers both preventative vulnerability and compliance controls, as well as real-time detection and incident response capabilities to reduce risks affecting critical business processes and data. The platform can be integrated with SIEM, GRC and network security products  Leadership: Mariano Nunez (CEO), Juan Pablo Perez-Etchegoyen (CTO)

Raised: $11.6M HQ: Boston, MA

 BioCatch is a provider of behavioral biometric, authentication and malware detection solutions for mobile and web applications. Available as a cloud solution, it proactively collects 500+ parameters to generate a unique user profile. Organizations use the platform to continuously authenticate users during their online sessions, protecting against cyber threats and fraudulent activity, such as account takeover and RitB  Leadership: Eyal Goldwerger (CEO), Avi Turgeman (CTO), Uri Rivner (Strategy)

Source: Momentum Partners, PitchBook Data, CrunchBase, Company Press Releases.

Raised: $10.0M HQ: Reston, VA

Raised: $50.0M HQ: Tel Aviv, IL

Raised: $58.0M HQ: Leesburg, VA

14

Commentary  RiskSense is a leader in proactive cyber risk management. It enables enterprises and governments to reveal cyber risk, quickly orchestrate remediation and monitor the results. This is done by unifying and contextualizing internal security intelligence, external threat data and business criticality across a growing attack surface  Its SaaS platform shortens time to remediation, increases operational efficiency, strengthens security programs, improves cyber hygiene and minimizes cyber risks  Leadership: Srinivas Mukkamala, Ph.D (CEO), Mark Fidel (Co-Founder/Corp Dev)  ID Experts provides software and services to organizations for managing cyber risks and data breaches, and to consumers to protect and restore their identities from identity theft. It offers a Data Breach Response that provides digital forensics investigation, data breach notification and crisis communications, credit monitoring, identity monitoring and health monitoring services for healthcare, financial services, retail, higher education and government organizations in the U.S.  Leadership: Bob Gregg (CEO), Rick Kam (President), Chris Kane (COO/CIO)  Verodin is defining the emerging concept of Instrumented Security. Its platform empowers customers to measure and continuously validate the cumulative effectiveness of layered security infrastructures revealing true security postures. Through automated defense analysis, its customers achieve maximum value from security spending, better leverage existing security investments and measurably improve their cyber prevention, detection and response capabilities  Leadership: Chris Key (CEO), Ben Cianciaruso (COO)  Cato Networks has developed a revolutionary new network security-as-a-service (NSaaS) platform that is changing the way network security is delivered, managed and evolved for the distributed, cloud-centric, and mobile-first enterprise. Its Cato Cloud platform has two parts: Cato Cloud Network which consolidates and encrypts all enterprise network elements using a network of POPs and the Cato Network Security Services, which then adds security offerings (e.g., NGFW) on top of the network  Leadership: Shlomo Kramer (CEO), Gur Shatz (CTO)  PhishMe is a provider of human-focused phishing defense solutions. Its intelligence-driven platform turns employees into an active line of defense by enabling them to identify, report and mitigate spear phishing, malware and drive-by threats. Its phishing incident response platform and phishing threat intelligence enables SOC and IR teams to respond faster to real threats – decreasing the risk of data breaches  Leadership: Rohyt Belani (CEO), Aaron Higbee (CTO), Jim Hansen (COO)

Momentum’s Watch List: Q4 2015 to Q2 2016 A Look Back At Those Companies With Momentum From Previous Quarters. Q2 2016

Q1 2016

Q4 2015

(04/26/16): In-Q-Tel Investment

Series B (04/20/16): $15M

Series A (07/06/16): $10M

Series B (08/23/16): $12M / $3M Debt

Series C (08/02/16): $21M

Series B (08/24/16): $15M

Series B (07/12/16): $10M

15

Notable Strategic Activity

1

acquires

acquires

acquires

$1.3 Billion

Not Disclosed

$4.2 Billion

September 19, 2016

September 18, 2016

September 7, 2016

acquires

acquires

acquires

$18 Million

$488 Million

$1.5 Billion

August 24, 2016

July 13, 2016

July 13, 2016

Vista Equity Acquires Infoblox Marks Vista’s Second Cybersecurity Acquisition This Year Having Acquired Ping Identity In June. Transaction Overview

Infoblox Overview 28

9/19/2016

EV / LTM Rev: acquires

3.5x

EV / NTM Rev:

3.4x

EV / LTM EBITDA:

NM

EV / NTM EBITDA:

18.0x

Network Security

$1.25 Billion

Vista Purchase Price @ $26.50 / Share

26

Share Price ($)

Date:

24

22 20 18 16 14 Jan-15

Mar-15

Company

Amount ($M)

September 2016

1,254.3 (acquisition)

June 2016

600.0 (acquisition)

April 2015

335.0 (20% stake)

December 2015

Series F Lead ($35M)

Source: Company press releases and websites, 451 Research.

May-15

Jul-15

Sep-15

Nov-15

Jan-16

Mar-16

May-16

Jul-16

Sep-16

With Infoblox Actionable Network Intelligence, you gain a platform that provides all the capabilities you need to more easily control, secure, and analyze your network

CONTROL

Infoblox Network Automation

Reporting & Analytics

Private Cloud/ Virtualization

Vista Equity Partners Security Portfolio Date

33%premium to closing share price over last 60 days 16% premium to price of $22.83 on day prior to announcement 73% premium to unaffected closing price as of May 11, 2016 when media first reports of interest in acquiring Infoblox by Thoma Bravo

  

DNS Traffic Control

SECURE

Infoblox Network Security

Threat Insight

Advanced DNS Protection

DNS Firewall

AUTOMATE

Infoblox Network Automation

NetMRI

Rationale “Vista has an excellent track record of supporting and adding value to technology companies, and we are thrilled to bring on a partner of their caliber and strategic expertise. This transaction will provide immediate and substantial value to Infoblox stockholders, while also giving Infoblox greater flexibility to execute on our long-term strategy to drive increased DDI automation and DNS security into the enterprise market. We are excited to begin our partnership with Vista and look forward to leveraging their operational insights as we continue to deliver the industry-leading products, solutions and customer service on which our customers rely.” – Jesper Andersen, President & CEO, Infoblox

18

Oracle Acquires Palerra To Boost Its Security Stack Palerra Is The Latest CASB To Be Acquired In The Market. Transaction Overview

Palerra Overview

Date:

9/18/2016

Total Raised:

$25M

acquires Santa Clara, CA

HQ:

2013

Founded: CEO:

Cloud Security

The LORIC platform provides threat visibility and ensures compliance of your cloud footprint by combining threat detection, predictive analytics, security configuration management, and automated incident response into a single solution. Threat Detection LORIC identifies existing threats to your cloud footprint by leveraging real-time threat intelligence feeds and machine learning techniques Predictive Analytics LORIC’s patent-pending modeling techniques evaluate risks across hundreds of threat vectors to provide you with a concise summary of potential threats.

Stage

Apr 2016

Series B

Feb 2014

Series A

Amount Raised ($M) 17.0

8.0


Security Configuration Management LORIC eliminates labor intensive, error prone manual processes and manages security configurations within cloud applications.

From branded cloud applications to cloud infrastructure, LORIC is constantly growing its list of supported cloud services

Rohit Gupta

Transaction Rationale

Funding Summary: $25.0M Date

LORIC

Automated Incident Response LORIC keeps enterprises secure by automating responses to threats with forensics, incident management, orchestration and remediation.

Selected Investors

“Together, Oracle and Palerra will help accelerate cloud adoption securely by providing comprehensive identity and security cloud services. The combination of Oracle’s Identity Cloud Service and Palerra’s CASB platform plan to deliver comprehensive protection for users, applications and APIs, data, and infrastructure to secure enterprises in their adoption of Cloud and SaaS applications.” – Peter Barker, SVP Identity Management and Security Products at Oracle

19

TPG Acquires Intel Security, Jointly Investing In New Spin-Out TPG Makes A Big Cybersecurity Bet. Transaction Overview

Transactions Summary / Rationale Transaction / Spin-Out Details

Date:

9/7/2016

Percentage Ownership:

51%

acquires HQ: CEO:

Enterprise Security

Santa Clara, CA Christopher Young

 TPG to own 51% stake; Intel to own 49% stake  TPG will invest $1.1B in the transaction (from TPG Partners VII fund), valuing McAfee’s equity at $2.2B. McAfee has net debt of $2B which Intel will finance for 3-5 months after the deal is completed  Intel SVP and Intel Security GM Chris Young and existing management team to lead the new company following transaction close Rationale  "As we collaborate with TPG to establish McAfee as an independent company, we will also share in the future success of the business and in the market demand for top-flight security solutions, creating long-term value for McAfee's customers, partners, employees and Intel's shareholders. Intel will continue our collaboration with McAfee as we offer safe and secure products to our customers.” - Brian Krzanich, CEO of Intel  "We believe that McAfee will thrive as an independent company. With TPG's investment, along with continued support from Intel, McAfee will sharpen its focus and become even more agile in its response to today's rapidly evolving security sector." - Jim Coulter, Co-Founder and Co-CEO of TPG

$4.2 Billion

McAfee Acquisition History Since Intel Acquisition Date

Amount ($M)

Date

NA

10/11

NA

5/13

376.2

3/11

NA

2/13

NA

2/11

10.7

2/12

NA

8/10

6,907.7

10/15

Company

(Sold Firewall Biz)


Company

Amount ($M)

TPG Security Portfolio Company

20

TPG Partner

Investment

Bryan Taylor

9/2/15

Series G

$117.5M ($3.4B Pre-Money)

Lead Investor

Nehal Raj

8/3/15

Series D

$85.0M ($1.0B Pre-Money)

Lead Investor

Proofpoint Acquires ReturnPath, Email Fraud Protection Division Acquisition Extends Proofpoint’s Suite Of Business Email Compromise (BEC) Solutions. Transaction Overview

Return Path’s Email Fraud Protection Overview

Date:

8/24/2016

Total Raised: acquires

$126.1M New York, NY

HQ:

1999

Founded: CEO:

Messaging Security

Key Features Consumer Email Fraud Protection

Enterprise Email Fraud Protection

Through a combination of authentication, reputation, and heuristics checks, Return Path offers complete spear phishing protection for inbound email threats (domain spoofing and brand spoofing).

Return Path helps you block bad emails spoofing your domains before they hit customer inboxes and empowers you to identify and respond to attacks spoofing your brand in other ways.

Managed Service

DMARC

Provide global 24/7 support, strategic project management, and unparalleled technical expertise

Domain-based Message Authentication, Reporting & Conformance—DMARC—protocol aims to put an end to domain-based email threats.

Matt Blumberg

Block Inbound threats before they hit your employees

$18 Million

Proofpoint Acquisition History Since 2013 Date Announced

Target

Remediate Detected malicious email

Transaction Summary & Rationale

Deal Value ($M)

Date Announced

11/3/2015

9.0

10/1/2013

23.0

3/2/2015

32.3

8/9/2013

25.0

10/23/2014

34.8

7/25/2013

2.5

5/20/2014

22.8

4/9/2013

4.5


Target

Detect Inbound threats that make it into the employee inbox

Deal Value ($M)

 Proofpoint paid $3.8 million at the close of the transaction and will spend the remaining $14.2 million over two years to complete the deal  “With our proprietary email threat data and technical expertise at its disposal, Proofpoint will now be fully equipped to offer the best end-to-end spear phishing solution on the market today. We are thrilled to partner with Proofpoint going forward and believe that the combined solution will be stronger for our Email Fraud Protection customers as well as a great home for the employees in our EFP division.” - Matt Blumberg, Co-Founder & CEO, Return Path 21

Thoma Bravo Acquires Healthcare IT Security Company Imprivata Imprivata Became The Second Public Cybersecurity Company To Get Acquired In July. Transaction Overview

Imprivata Overview

Date:

acquires

7/13/2016

EV / LTM Rev:

3.7x

EV / LTM EBITDA:

NM

HQ:

CEO:

OneSign Platform Capabilities Single sign-on, authentication management, and virtual desktop roaming enabling

+

Lexington, MA

Founded:

2001 Omar Hussain

Users: Identity & Access Management

Imprivata Confirm ID

2,800,000+ $488.5 Million

 Comprehensive identity and two-factor identification platform  Combines security with convenience  Creates a secure chain of trust

Rationale

Transaction Details  Thoma Bravo to acquire the remaining 95.2% stake in Imprivata, funded with equity from Thoma Bravo Fund XII  Imprivata acquired for $19.25, a 33% premium to Imprivata’s last closing price of $14.50  Imprivata made its public debut in June 2014 at a price of $15.00 Source: Company press releases and websites, Capital IQ, 451 Research.

Enables secure collaboration across care teams and organizations

 “We're tremendously excited about Thoma Bravo's investment in our company and believe this transaction represents a great outcome for our current shareholders. Given Thoma Bravo's successful track record in both security and healthcare IT, today's partnership is an endorsement of Imprivata's corporate vision and our relentless focus on the customer experience -- a value which has established us as the vendor of choice in healthcare IT security.” – Omar Hussain, President & CEO of Imprivata

22

Avast Acquires AVG With Financial Support By CVC Capital Partners Avast + AVG Creates Significant Scale In Consumer Security.

7/7/2016

Date: Backed By

acquires

AVG Stock Performance Since 2015

EV / LTM Rev:

3.4x

EV / NTM Rev:

3.3x

Share Price ($)

Transaction Overview $29 $27 $25 $23 $21 $19 $17

Avast Purchase Price @ $25 / Share

$15

EV / LTM EBITDA:

11.7x

EV / NTM EBITDA:

9.1x

Endpoint Security

$1.46 Billion

Transaction Funding 

Avast will acquire AVG for $1.5 billion in cash, paying $25 a share, a 33% premium over 7/6 closing price and 32% over 6-mo average



Avast plans to finance the transaction using cash balances on hand and committed debt financing from third party lenders  Avast has received a financing commitment of $1.69 billion from Credit Suisse, Jefferies and UBS  In addition, Avast has contributed $150 million in equity


Jan-15

Mar-15

May-15

Jul-15

Sep-15

Nov-15

Jan-16

Mar-16

May-16

Jul-16

Rationale 

Advanced web and cloud security

Users: traffic management  Mobile Encrypted Million  100+ Network performanceScale and In optimization

Mobile Users 60+ Million

Consumer Security Desktop Users: 90+ Million

400M+ Users

Desktop Users: 170+ Million

 Combination creates significant scale in consumer security with 400M+ users, including 160M+ on mobile  AVG will provide Avast with new growth in consumer mobile and SMB markets  Highly complementary geographical presence extends Avast’s reach into higher monetizing geos

"Our new scale will allow us to accelerate investments in growing markets and continue to focus on providing comprehensive and simple-to-use solutions for consumers and businesses, alike. As the definition of online security continues to shift from being device-centric, to being concerned with devices, data and people, we believe the combined company, with the strengthened value proposition, will emerge as a leader in this growing market,“ said Gary Kovacs, CEO, AVG

23

Notable Fundraising Activity

1

$40.0M

$40.0M

$30.0M

$32.0M

Series D Financing

Series C Financing

Series B Financing

Venture Round

September 26, 2016

September 15, 2016

September 13, 2016

September 13, 2016

$15.0M

$27.5M

$21.0M

Series B // Debt Financing

Venture Round

Series C Financing

August 23, 2016

August 18, 2016

August 2, 2016

StackPath $180.0M

$64.0M

Series A Financing

Series C Financing

July 25, 2016

July 5, 2016

Raises $40M In Series D Financing. Company Overview Description

Product Overview

Skyhigh Networks, a cloud access security company, enables companies to embrace cloud services with appropriate levels of security, compliance, and governance for financial services, professional services, healthcare, high technology, media and entertainment, manufacturing, and legal customers. It offers Skyhigh Cloud Access Security Manager, which enables and accelerates the secure adoption of cloud services; and rapid discovery, instant analysis, and 3-click security services.

A single, seamlessly integrated cross-cloud platform for all cloud security needs VISIBILITY

 Provides comprehensive cloud usage analytics  Asses risk and sensitive data  Enables real-time coaching and policy enforcement

Founders / Management Rajiv Gupta Co-Founder & CEO

Kaushik Narayan Co-Founder & CTO

Founded

2011

HQ

Campbell, California

Amount Raised

Kamal Shah SVP, Products & Marketing

Sekhar Sarukkai Co-Founder & SVP Engineering

THREAT PROTECTION

Trevor Eddy SVP, Sales

 Leverages machine learning to detect compromised accounts, malware, and other threats  Responds to exfiltration attempts  Supports post-incident investigation

DATA SECURITY

 Limits risk through controlled encryption of sensitive data  Defines contextual access control policies to protect data from unauthorized access

$106.5M

FundingSummary: Summary:$88.0M $106.5M Funding

A Trusted Leader In Security, Governance, and Enablement Broad Industry Coverage Financial Services

COMPLIANCE

 Customizes policies to identify regulated data  Enforces DLP procedures  Optimizes remediation action to restore files and permissions

Healthcare

Proven CASB Expertise

40% of Fortune 500

Government

Date

Stage

Sept 2016

Series D

Jun 2014

Series C

May 2013

Series B

Apr 2012

Series A

Amount Raised ($M)

Education

Manufacturing

30 Million Users

600+

40.0

Enterprises

5x More Customers Than Other CASBs

26

40.0 20.0 6.5

Selected Investors

Raises $40M In Series C Financing. Company Overview Description

Product Overview

BitSight Technologies is transforming how companies manage information security risk with objective, verifiable and actionable Security Ratings. The company built its Security Rating Platform to continuously analyze vast amounts of external data on security issues and behaviors in order to help organizations manage third party risk, underwrite cyber insurance policies, benchmark performance, conduct M&A due diligence and assess aggregate risk.

Enhances position visibility through daily security performance ratings  Gathers and analyzes global security outcome data to create sophisticated algorithm  Produces objective daily security ratings, alerts changes, and provides actionable information to mitigate risk  Improves accuracy in benchmarking, risk management, and cyber insurance applications

Founders / Management Stephen Boyer Co-Founder & CTO

Nagarjuna Venna Co-Founder & CPO

Founded

2011

HQ

Cambridge, Massachusetts

Amount Raised

$88.0M

Shaun McConnon CEO

Tom Turner President & COO

Jacob Olcott VP Business Development

Transforming The Way Organizations Evaluate Risk

INTEGRAL TO BUSINESS DECISIONS

HISTORICAL PERFORMANCE MEASUREMENT

PROVEN FOR MANAGING RISK

RESPONSIBLE DATA STEWARDSHIP

HIGHEST QUALITY DATA

UNPARALLELED CUSTOMER SUCCESS

DISCOVER

SECURITY RATINGS

Follows outside-in model to uncover and pinpoint potential risks  Identifies third and fourth party connections in vast network of vendors and service providers  Highlights precise point of failure in supply chain  Assesses dependencies in an organization’s network and returns a comprehensive analysis of risk aggregation


Stage

Sept 2016

Series C

Jun 2015

Series B

23.0

Jun 2013

Series A

24.0

Apr 2011

Seed

FAIR & OBJECTIVE

NATIONAL SCIENCE FOUNDATION (NSF) BACKING

27


1.0

Selected Investors

Raises $30.0M In Series B Financing. Company Overview Description

Product Overview

Cato Networks, provides organizations with a software-defined and cloud-based secure enterprise network. Cato delivers an integrated networking and security platform that securely connects all enterprise locations, people and data. The Cato Cloud reduces MPLS connectivity costs, eliminates branch appliances, provides direct, secure internet access everywhere, and seamlessly integrates mobile users and cloud infrastructures to the enterprise network.

One Network. One Security. One Policy.

The Cato Cloud delivers Network Security as a Service by tightly integrating enterprise networking and network security - in the Cloud

Cato Cloud

Founders / Management Shlomo Kramer Co-Founder & CEO

Founded

2015

HQ

Tel-Aviv, Israel

Amount Raised

$50M

Gur Shatz Co-Founder & CtO

Glenn Esposito VP Sales, Americas

Yishay Yovel VP Marketing

Cloud Network

Aviram Katzenstein VP Operations

Management Application

Security Services

Cato Editions (Web/Cloud/Network)

Cato Cloud Features USE CASES FOR CATO NETWORKS

Integrated Network & Security In The Cloud

Low Latency Network @ Affordable Price

Your IT Team, Augmented

Enterprise-Grade Security Within Your Reach

Cloud Wide Threat Visibility

Funding Summary: $50.0M APPLIANCE ELIMINATION

LOW LATENCY AFFORDABLE WAN

DIRECT INTERNET ACCESS

HYBRID CLOUD NETWORK INTEGRATION

SECURE & OPTIMIZED SD-WAN

MOBILE WORKFORCE SECURE CLOUD ACCESS

28

Date

Stage

Sept 2016

Series B

Oct 2015

Series A

Amount Raised ($M) 30.0 20.0

Selected Investors

Always Up to Date Agile Cloud Software

Raises $32.0M Venture Round. Company Overview Description

Product Overview

Claroty enables customers to secure and optimize the industrial control networks that run the world’s most critical infrastructure. The company’s enterprise-class OT security platform is designed to address the unique safety and reliability requirements necessary to protect industrial networks– e.g., industrial control systems, SCADA, industrial IOT and others.

Claroty discovers the most granular OT network elements, extracts the critical information, and distills it into actionable insights needed to secure and optimize complex industrial control environments Cyber Security Gain extreme visibility to uncover advanced threats and malicious activity

Founders / Management

See Amir Zilberstein Co-Founder & CEO

Benny Porat Co-Founder & CTO

Founded

2014

HQ

New York, New York

Amount Raised

$32.0M

Galina Antova Co-Founder & Chief of Business Development

Supported Vendors

Nadav Zafrir Team8 Founder & Claroty President

Yaron Shalom CFO & COO

OT Networks

Electric Power

Operational Resilience Utilize real-time monitoring to detect human error and operational issues

Secure

Know

Complete Network View Full representation of the network topology, revealing all connections between assets, across all different zones and levels

Baseline Deviations Claroty learns the finite set of connections, conversations and commands that represent the legitimate behavior for each asset, and alerts on anomalous behavior that violates it

Real-Time Monitoring Claroty constantly monitors OT networks using safe deep packet inspection by summarizing multiple associated events into a single robust alert

Advanced View Filters Claroty lets you create any custom view using a set of filters, including: protocol, firmware version, name, asset type, criticality, risk level, more

Critical Changes Real-time monitoring for normal, but high-risk changes that pose an operational safety, security or process integrity risk

Proactive Network Enhancement Leverage Claroty’s extreme visibility to optimize the OT network, prevent cyber attacks and ensure process integrity.

Data Needed About Your Environment Claroty provides detailed asset and communications information presented in various dashboards and tables

Malicious Activity Asset behavior that indicates distinct malicious presence and activity in the network

Incident Response and Forensics Respond quickly and efficiently to critical issues and conduct deeper analysis to understand the incident root causes.

Oil & Gas

Funding Summary: $32.0M Manufacturing

Chemicals

Data Center

29

Date

Stage

Sept 2016

Series A + B

Amount Raised ($M)

32.0

Selected Investors

Raises $12M In Series B Financing and $3M in Debt Financing. Company Overview Description

Product Overview

ThreatQuotient develops cyber security software that enables organizations to manage threat intelligence and defend against cyber-attacks. It offer Threat Intelligence Platform, which ingests and centralizes over 120+ feeds ranging from commercial cloudsourcing communities to malware sandboxes. The platform uses third party tools to provide insights to enrich your data with OpenDNS, VirusTotal, Threat Recon, and more. The turnkey integration of over 25 security technologies keeps your detection system up to date with the most high risk indicators.

ThreatQ: Threat Intelligence Platform Centrally manages and correlates external sources with internal security and analytics solutions for contextual intelligence on a single screen

Founders / Management

John Czupak President and CEO

Founded

2013

HQ

Sterling, VA

Amount Raised

$27.2M

Wayne Chiang Chief Architect & Co-Founder

Ryan Trost CTO & Co-Founder

Leonard Kurtzman CFO

Ingest & Centralize Data

Nurture Indicators

Enable your choice of over 120+ feeds

Automatically correlate IOCs and leverage a variety of third party tools to provide additional insights to enrich data

Marc Solomon CMO

Automate Deployment Turnkey integrations with 25+ security technologies enables you to keep your detection systems up to date with the most high risk indicators

Funding Summary: $27.2M

Over 120+ feeds ranging from commercial cloud sourcing communities, open source intelligence blacklists, and malware sandboxes.

30

Date

Stage

Aug 2016

Debt

Aug 2016

Series B

Dec 2015

Series A

Apr 2015

Seed

Amount Raised ($M) 3.0 12.0 10.2 2.0

Selected Investors

Raises $27.5M In Venture Round. Company Overview Description

Product Overview

ID Experts, provides software and services to organizations for managing cyber risks and data breaches, and to consumers to protect and restore their identities from identity theft. It offers a Data Breach Response that provides digital forensics investigation, data breach notification and crisis communications, credit monitoring, identity monitoring, and health monitoring services for the U.S. organizations, attorneys, and insurers.

YourResponse™ Data Breach Response YourResponse is a proprietary, patented methodology for analyzing and responding to a data breach incident that results in the most positive outcomes.

Founders / Management Bob Gregg CEO

Founded

2003

HQ

Portland, Oregon

Amount Raised

$32.5M

Rick Kam President & Co-Founder

Chris Kane COO / CIO

Paul O’Mara Sr. VP, Sales & Professional Services

Doug Pollack Chief Strategy & Marketing Officer

Trusted Partners For Data Breach & Identity Protection

Complete Identity Protection

Medical Identity Monitoring

MyIDCare is the most complete solution for protecting privacy, bringing victims peace of mind and protecting your organization’s good name.

MIDAS is our innovative medical ID alert system. This technology serves two purposes. It protects individuals from medical ID theft while also helping health insurers address fraud & abuse.

Your Response services include:  Digital Forensics- analysis on data breaches  Data Breach Notification-quick and exact notifications of breach

MyIDCare is split into two categories:  Monitoring-includes credit, cyber, identity, and healthcare monitoring  Recovery-identities are restored to pre-theft status

Breach Products Include:  Credit Monitoring-credit reports from all 3 credit bureaus  Identity Monitoring- covers all aspects of a person’s identity  Health Monitoring-monitors all aspects of patient medical records  Cyberscan- 24/7 internet surveillance

MyIDCare includes:  Single/Tri Credit Monitoring  MIDAS: Medical Identity Monitoring  Cyber & Identity Monitoring  ID Theft Insurance  Recovery Superhero  Member Services

Midas services include:  Protects from Medical Identity Theftmembers can review claims, keeping medical records secure  Detects Healthcare Fraud- alert driven model engages members as first line of defense to identify fraud  Engages Members for ACA Compliance- involves patients more closely in their care  Lowers Healthcare Cost- helps you identify and respond to fraud much earlier, thus lowering costs

ID Experts serve all sizes and industries but specializes in healthcare and government Government Largest provider of identity protection services to the federal government--Tier 1 status on the GSA Blanket Purchase Agreement for Identity Protection Services


Health Plans Increasingly at risk from cyber intrusions, health plans are becoming proactive in protecting their members from fraud-ID Experts solutions are unmatched

Trusted By: 31

Date

Stage

Aug 2016

Venture

Jan 2016

Series A


Selected Investors


Product Overview

Distil Networks provides public and private cloud security software that blocks malicious

API Security

Bot Detection & Mitigation

bots and automated computer programs attacking Websites. Its software enables users to protect their Websites against Web scraping, competitive data mining, form spam, and click frauds. The company serves mid-market and enterprise customers worldwide.

Distil’s protection leverages machine learning algorithms, real time device fingerprinting, and the world’s largest Known Violators Database

Distil’s API Security tracks API clients and monitors acceptable usage, acting as an automatic shield against API hijacking, scraping, and abuse

Founders / Management Rami Essaid CEO & Co-Founder

Founded

2011

HQ

Arlington, Virginia

Amount Raised

$59.1M

Engin Akyol CTO & Co-Founder

Protects Leading Websites

Andrew Stein Chief Scientist & Co-Founder

Dominick Fuccillo VP of Finance & Corp Dev

Distil’s Threat Intelligence service delivers insights on IP addresses gathered from thousands of organizations including consumers & commercial ISPs

Deployment Options

Cloud CDN

Courtney Cleaves Director of Marketing

Threat Intelligence

 Deploy in minutes on global network  Optimized content for faster delivery & less bandwidth  Increases web scalability

Appliance

 Easy installs on virtualized or metal appliances  Seamless integration with CDNs, load balancers, & network infrastructure  Automatically obtains new bad bot fingerprints

Funding Summary: $59.1M Acquisition Summary

Acquired For $10M in Jan 2016 ScrapeSentry, an MSSP, added a 24/7 SOC and team of analysts to respond to bot threats in real-time and provide post-incident response

32

Date

Stage

Aug 2016

Series C

Jun 2015

Series B

May 2014

Series A

Jan & Mar 2013

Seed

2012-2016

Debt

Amount Raised ($M) 21.0 21.0 10.0 2.0 5.1

Selected Investors

StackPath StackPath Raises $180 Million In A Series A Round & Acquires Four Companies In The Process. Company Overview Description

Product Overview

StackPath is a web services platform for security, speed and scale. It is the first platform to unify enterprise security solutions by leveraging collaborative intelligence that makes each service smarter and more secure with every threat detected, in addition to vastly improving the customer experience. It effectively deputizes each service on the host network with the authority to identify and communicate real-time threats against it to an intelligent data repository.

Security Web Services Built Secure, Powered By Machine Learning

Frictionless Global Scale, Built On Security  Built for 100Gbps connectivity  Designed for customers growth  Regular vulnerability scans look for unauthorized usages

 Cloud based DDoS protection technology  Layers of physical security  Data secured with AES and TLS

Founders / Management Dr. Lance Crosby Chairman & CEO

Andrew Higginotham COO, President

Kimberly Sheehy CFO

Paul Drew CIO

Taylor Dondich VP Engineering

Why StackPath? Speed

Founded

2015

HQ

Dallas, Texas

Amount Raised

$180 M

Acquired Company

Scale

July 2016 July 2016

Fireblade offers web security services in the areas of DDoS protection, Web application security, performance monitoring, and web acceleration aspects.

July 2016

Staminus develops advanced security availability technology to mitigate the largest and most complex DDoS attacks in the world.

April 2016

Cloak is a consumer VPN platform with native iOS and Mac applications to allow people to securely use the internet while on untrusted networks.

24/7 Customer Support

Transparency

Simplicity Only web services platform with flat, global pricing and no contracts

Company Description MaxCDN is a content delivery network that helps companies accelerate static and dynamic content around the world.

Support

Unified interface for all of your essential services for scalability

Speed, not only from network capacity but from support as well

StackPath Acquisition Summary Date

Network

Publish Net Promoter Score (NPS) and real-time network latency statistics to website


Stage

July 2016

Series A

Amount Raised ($M)

Selected Investors

150.0

30.0

33

Insiders


Product Overview

Darktrace is a leader in Enterprise Immune System technology, a new category of cyber solutions based on pioneering Bayesian mathematics. Darktrace addresses the challenge of insider threat and advanced cyber-attacks through its unique ability to detect previously unidentified threats in real time, as manifested in the emerging behaviors of the network, devices and individuals. Some of the world’s largest organizations rely on Darktrace’s adaptive, self-learning platform to spot anomalous activity within the enterprise, in sectors including energy and utilities, financial services, telecommunications, retail and transportation.

Threat Visualizer

Steve Chamberlain CFO

Founded

2013

HQ

London, England

Amount Raised

$104.5M in 3 Rounds

Poppy Gustafsson COO

Gary Szukalski CMO

Jack Stockdale Global CTO

Enterprise Immune System

Advanced Machine Learning

No Rules or Signatures

Revenue growth over 100% since 2014

 Extends Darktrace’s Core Power of Detection  Stops Threats Before They Spread  Action Taken is Always Highly Targeted

 Unique Global View of Enterprise  Flexible Dashboard  Real-time Global Threat Mapping

Driven By World-Leading Mathematicians Founded By Intelligence Experts From Cambridge, MI5, and GCHQ

Self-learns, Self-Defends In Real Time

Shines a Light Into Your Network

Founders / Management Nicole Eagan CEO

Antigena

Real-Time Threat Detection


Selected Customers

Security Company of the Year 2016

34

Date

Stage

Jul 2016

Series C

Jul 2015

Series B

Mar 2015

Series A

Amount Raised ($M) 64.0 22.5 18.0

Selected Investors

M&A Activity In Cybersecurity

Strategic Moves For Competitive Advantage Accelerating The Landscape Of Buyers For Cybersecurity Companies Has Expanded Over Time. Notable Deals By Sector

Cybersecurity

PE

IT

PE

9/16: $1.3B / 3.5x

9/16: $4.2B / NA

Industrial ISP

9/16: NA / NA

7/16: $1.5B / 3.4x

6/16: $293M / 10.0x+

6/16: $4.7B / 7.9x

1/16: $275M / 6.9x

7/15: $190M / NA

Industrial / IoT

ISP

Defense

1/16: NA / NA

10/15: $9M / NA

10/15: $400M / 7.5x

12/14: $710M / 6.0x

7/15: NA / NA

6/16: $600M / NA

Defense

IT

Most Active Acquirers

7/14: NA / NA

Source: Momentum Partners.

36

4/15: $786M / 3.6x

4/15: $1.9B / NA

10/14: $233M / 3.0x

Cybersecurity M&A Activity: Deal Volume and Exit Multiples Cybersecurity M&A Activity In Q3 Has Retreated To More Normalized Levels. Cybersecurity M&A Volume By Year (# Deals) 136 107

101

2010 

2011

88

2012

Median Cybersecurity EV/TTM Revenue Multiples 143 5.5x

100

2013

97

2014

2015

2013

YTD16

5.9x 5.0x

2014

4.5x

2015

YTD16

After reaching record levels last year, Cybersecurity M&A activity in 2016 has retreated to more normalized levels (by # of deals)



There are only 9 deals through 3Q16 with disclosed multiples at a median of 5.9x TTM revenue

Total through 3Q16 announced M&A volume totaled $14.3B, representing 97 deals (Visa Equity/Infoblox, TPG/McAfee, Avast/AVG in Q3 & Symantec/BlueCoat in Q2, represented the majority of $ amount ($11.6B))



Q3 had several notable acquisitions involving Private Equity counterparties:



Contemplated transactions are increasingly falling into three categories: 

Transformational (a la Symantec/Blue Coat; Avast/AVG)



Opportunistic (a la Proofpoint/ReturnPath; Core Security/Damballa)



Private Equity/Buyout (a la Vista Equity/Infoblox, Ping; TPG/McAfee)





Vista Equity Partners acquired Infoblox, 3.5x TTM Revenue



Thoma Bravo acquired Imprivata, 3.7x TTM Revenue



Avast acquired AVG, 3.4x TTM Revenue (Backed by CVC Capital Partners)

After two straight years of declining multiples, 2016 multiples have increased 32% since 2015 and are inline with multiples in 2013 

Source: Momentum Partners, 451 Research.

37

Several notable strategic transactions in 2013 included IBM/Trusteer (22.5x), Cisco/Sourcefire (8.9x) and McAfee/Stonesoft (7.0x)

Cybersecurity M&A: A Closer Look At Deal Value & Multiples Cybersecurity M&A Activity Since 2010 With Disclosed Transaction Values And Multiples. M&A By Deal Size

M&A By Valuation Multiples (EV / LTM Rev) 0.35

55% 50% 45%

30%

47%

0.30

97

40%

24%

0.25

35% 0.20

30%

32

29

18%

25

Median Deal Size For >10x

$213M

25%

0.15

20%

14%

15% 10%

19

16% 0.10

11%

33

28

22

5%

6%

7%

12

15

22 0.05

11 0.00

0% >$0M - $50M

$50M - $100M

$100M - $250M

$250M - $500M

$500M - $1B



The median exit enterprise value for Cybersecurity exits since 2010 was $65.0M



M&A exits in Cybersecurity are typically below $100M – 61%+ of the time



28%

>0.0 - 3.0x

$1B+



3.0x - 5.0x

5.0x - 10.0x

10.0x+

Valuations for M&A exits in Cybersecurity vary for many reasons – growth, market leadership, customer validation, technology and team



Exits above $1B are rare representing 7% of all deals (5 public, 7 private and 3 spin-out)

Exits >10x are a minority (18%) where the buyers are typically cash rich and willing to pay what it takes (median cash balance of the buyers at time of acquisition was $2.9B and median market cap was $18.3B)

Buyers

Source: Momentum Partners, 451 Research, Capital IQ.

38

Notable Cybersecurity M&A Transactions Cybersecurity M&A Transactions With Disclosed Transaction Values. Date

Target

Buyer

Enterprise Value ($M)

09/19/16

Infoblox

Vista Equity Partners

1,254.3

358.3

3.5x

09/07/16

McAfee

TPG Capital

4,200.0

-

-

08/26/16

PhenixID

Clavister Holding

11.5

1.1

10.5x

08/24/16

Return Path, Email Fraud Protection Division

Proofpoint

18.0

-

-

08/17/16

Modulo Security

SAI Global

5.2

-

-

08/17/16

Sypris Electronics, Cyber Security Solutions

Analog Devices

42.0

-

-

07/26/16

Appcito

A10 Networks

6.5

-

-

07/25/16

OpenLimit

WISeKey

20.4

13.1

1.6x

07/22/16

Damballa

Core Security Technologies

9.0

-

-

07/19/16

Confer Technologies

Carbon Black

100.0

-

-

07/13/16

Imprivata

Thoma Bravo

07/7/16

AVG Technologies

AVAST Software

06/29/16

IDscan Biometrics

GB Group

06/28/16

Cloudlock

Cisco

06/12/16

BlueCoat

Symantec

06/07/16

AccelOps

Fortinet

06/01/16

Ping Identity Corporation

Vista Equity Partners

05/05/16

Advanced Security Consulting

Falanx Group

04/27/16

ANXeBusiness

Open Text

04/18/16

CSIdentity

Experian

360.0

Source: Capital IQ, 451 Research.

39

TTM Revenue ($M)

EV / Revenue

488.5

131.1

3.7x

1,463.0

430.6

3.4x

60.8

10.3

5.9x

293.0

−

10.0x+

4,722.2

598.3

7.9x

32.0

−

−

600.0

−

−

0.8

−

−

104.0

−

−

−

−


Target

Buyer


TTM Revenue ($M)

03/23/16

Sookasa

03/10/16

Agata Solutions

Barracuda Networks

0.4

−

−

CyberArk

3.1

–

–

03/03/16

Safend

SuperCom

02/29/16

Resilient Systems

IBM

02/18/16

ValidSoft

Cross River Initiatives

02/08/16

IronKey Enterprise Management Services

DataLocker

02/08/16

IID

Infoblox

02/01/16

Invotas

FireEye

30.0

–

–

01/20/16

iSight Partners

FireEye

275.0

40.0

6.9x

01/13/16

ScrapeSentry

Distil

10.0

−

−

01/05/16

TowerSec

Harman Becker Automotive Systems

75.8

−

−

12/16/15

Evault

Carbonite

14.0

−

−

12/14/15

SurfRight

Sophos

31.8

−

−

12/11/15

Cyveillance

LookingGlass Cyber Solutions

35.0

18.0

1.9x

12/10/15

Trustev

TransUnion

44.0

−

−

11/24/15

Fox-IT Group

NCC Group

140.6

29.0

4.9x

11/17/15

Aura Information Security

Kordia Group Limited

6.5

−

−

11/09/15

Secure Islands

Microsoft

11/09/15

Elastica

Blue Coat Systems

11/02/15

Bloxx

Akamai


40

EV / Revenue

1.5

–

–

100.0

−

−

12.6

–

–

0.4

–

–

45.0

–

–

77.5

−

−

280.0

7.5

37.3x

18.7

−

−


Target

Buyer


TTM Revenue ($M)

10/27/15

Lancope

Cisco

452.5

−

−

10/22/15

Cloudpath Networks

Ruckus Wireless

9.0

−

−

10/21/15

TippingPoint Technologies

Trend Micro

300.0

169.0

1.8x

10/19/15

Vormetric

Thales e-Security

421.0

53.5

7.9x

10/13/15

Logentries

Rapid7

71.1

−

−

10/09/15

LastPass

LogMeIn

115.7

11.2

10.3x

10/08/15

Daegis

Open Text

20.8

23.7

0.9x

10/07/15

Viewfinity

CyberArk

30.5

−

−

10/06/15

Code Green Networks

Digital Guardian

18.0

−

−

10/05/15

Foreground Security

Raytheon Company

62.0

−

−

09/29/15

Intronis

Barracuda Networks

65.0

20.6

3.2x

09/24/15

Billguard

Prosper

30.0

−

−

09/22/15

Elitcore Technologies

Sterlite Technologies

27.3

22.3

1.2x

09/21/15

Absolute Software

HEAT Software

11.0

−

−

09/16/15

Infoplex

Bulletproof Group

2.6

4.3

0.6x

09/08/15

Adallom

Microsoft

290.0

−

−

09/04/15

Good Technology

Blackberry

425.0

211.9

2.0x

08/25/15

Above Security

Hitachi Data Systems

4.7

−

−

08/06/15

Pawaa Software

Cisco

5.0

−

−

07/31/15

Sansa Security

ARM Holdings

71.6

−

−


41

EV / Revenue


Target

Buyer


07/09/15

Caspida

Splunk

190.0

−

−

06/30/15

OpenDNS

Cisco Systems

635.0

−

−

06/26/15

White Sky

Intersections

1.1

−

−

06/16/15

Knowledge Consulting Group

ManTech International

68.0

−

−

06/10/15

Brivo Systems

Dean Drako

50.0

−

−

06/09/15

Reflexion Networks

Sophos

22.0

−

−

06/08/15

IdMlogic

CA Technologies

20.0

−

−

06/02/15

nSense

F-Secure

20.0

7.8

2.6x

05/27/15

ShieldArc

Palo Alto Networks

18.0

−

−

05/06/15

Privax

AVG

60.0

−

−

05/04/15

NT Objectives

Rapid7

04/28/15

Cervalis

CyrusOne

04/21/15

Watchdox

Blackberry

04/20/15

Websense

Raytheon

04/14/15

Fidelis Cybersecurity

Marlin Equity Partners

04/18/15

Oculis Labs

Optio Labs

04/07/15

Trustwave

Singtel

04/02/15

Lacoon Mobile Security

Check Point

03/31/15

Redspin

Auxilio

03/24/15

Accumuli

NCC Group


42

TTM Revenue ($M)

EV / Revenue

6.5

−

−

400.0

70.0

5.7x −

70.0

−

1,900.0

−

−

200.0

60.0

3.3x

0.5

−

−

785.7

216.0

3.6x

80.0

−

−

3.9

−

−

82.8

34.9

2.4


Target

Buyer


TTM Revenue ($M)

EV / Revenue

03/10/15

Blue Coat Systems

Bain Capital

2,400.0

−

−

03/10/15

CyActive

Paypal

43.0

−

−

03/02/15

Emerging Threats

Proofpoint

32.3

−

−

03/02/15

Xerocole

Akamai

16.6

−

−

03/02/15

Cloudshield

Lookingglass Cyber Solutions

5.0

−

−

02/24/15

Optenet

Allot Communications

02/19/15

MegaPath Managed Services Business

Global Technology & Telecom

01/14/15

IntellinX

Bottomline Technologies

84.9

−

−

12/09/14

Tripwire

Belden

710.0

118.5

6.0x

11/13/14

Aorato

Microsoft

200.0

−

−

11/05/14

Blackbird Technologies

Raytheon

420.0

−

−

10/21/14

Silversky Networks

BAE Systems

232.5

−

−

10/20/14

RightSignature

Citrix Systems

10/13/14

Danaher (Textronix, Arbor, Fluke)

Netscout

10/01/14

MobileSpaces

09/15/14 09/11/14

38.0

−

−

152.4

142.4

1.2x

36.0

−

−

2,619.4

836.0

3.1x

Pulse Secure

100.0

−

−

Attachmate

Micro Focus

2,159.4

875.4

2.5x

Morvirtu

Blackberry

32.5

−

−

09/04/14

Meldium

LogMeIn

15.0

−

−

09/03/14

Location Labs

AVG Technologies

220.0

33.0

6.7x

09/02/14

BeyondTrust Software

Veritas Capital

310.0

70.5

4.4x


43


Target

Buyer

09/02/14

SOFTPRO

Kofax

08/08/14

SafeNet

Gemalto

08/04/14

MDotLabs

07/31/14

NetClarity

07/29/14


TTM Revenue ($M)

EV / Revenue

34.7

13.3

2.6x

890.0

454.8

2.0x

Comscore

4.5

−

−

Hexis Cyber Solutions

1.9

−

−

Secusmart

Blackberry

9.0

−

−

07/21/14

Retail Decisions

ACI Worldwide

205.0

−

−

07/08/14

Delphiis

Auxilio

2.7

−

−

07/07/14

CA Arcserve Data Protection Assets

Marlin Equity Partners

170.0

−

−

06/23/14

ArmstrongAdams

Accumuli

6.3

−

−

05/20/14

NetCitadel

Proofpoint

22.8

−

−

05/19/14

Divide

Google

120.0

−

−

05/06/14

nPulse Technologies

FireEye

67.1

−

−

04/24/14

DecTech Solutions

GB Group

34.2

9.8

3.5x

04/23/14

docTrackr

Intralinks

10.0

−

−

04/07/14

Metaforic

INSIDE Secure

17.4

−

−

03/31/14

Blancco Oy

Regenersis

82.7

17.1

4.8x

03/24/14

Cyvera

Palo Alto Networks

213.3

−

−

02/23/14

Boxtone

Good Technology

101.0

20.9

4.8x

02/10/14

Cyberoam

Sophos

80.0

−

−

02/06/14

Skyfence

Imperva

65.0

−

−

Source: Capital IQ, 451 Research. Note: NM – Not Meaningful

44


Target

Buyer


TTM Revenue ($M)

02/06/14

Incapsula

01/30/14

Tomium

01/22/14

Imperva

40.5

−

−

Imperva

8.1

−

−

AirWatch

VMware

1,545.0

−

−

01/06/14

Morta Security

Palo Alto Networks

10.3

−

−

01/02/14

MANDIANT

FireEye

826.5

102.0

8.1x

12/12/13

Lemon

LifeLock

42.6

0.6

NM

12/09/13

QUMAS

Accelrys

47.8

19.3

2.5x

12/03/13

Alaric

NCR

78.4

−

−

12/02/13

Prolexic

Akamai

402.6

−

−

10/29/13

Net Optics

Ixia

190.0

49.0

3.9x

10/01/13

41st Parameter

Experian

324.0

−

−

Mean

286.4

133.4

5.2x

Median

60.0

34.0

3.6x


45

EV / Revenue

VC Activity In Cybersecurity

Financing Activity Since 2010 Cybersecurity Startups Raised $15.1 Billion Across 1,244 Deals Since 2010. Investment Deals And Dollars

($B) (2010 – 3Q16)

($M) (Q1 2010 – Q3 2016) $1,699

59

Investments ($B)



Deals

$269

$427

53

$515 $545

49

50

80 $1,271 72

$931

$920

$500 $543

Investments ($M)

Q2'16

Q1'16

Q1'15

Q4'14

Q3'14

Q2'14

Q1'14

$261

Q4'13

Q1'12

YTD16

$510

$446

49

$844 $818

Q3'13

33 24

Q4'11

2015

Deals

2016 has reached record numbers YOY, with 2016



Over the last eight quarters investors have poured $8.6B into cybersecurity

on pace to be larger than 2015 in both $ amounts



On a quarterly basis 3Q16 has become the 2nd largest quarter, behind 1Q16 in investments, with value of deals

and deal volume



35

Q3'11

2014

Q2'11

2013

Q1'11

2012

Q4'10

2011

Q3'10

2010

Q1'10

$0.8

31

28 $219 $259 $242 $248 $264 $197 $212 $236 $141 $130

$1.2 $0.8

30

23

49 42

Q2'13

$1.7

30

36

Q1'13

27

51

47

Q3'12

$2.7

Q2'10

108

120

40

Q4'12

156

57

Q4'15

$3.9

207

Q3'15

$3.9

$1,164 $1,245 67 64 57 61

Q2'15

219

Q2'12

201

232

Q3'16

Investment Deals And Dollars

Dollars invested shows significant increase in 3Q16, with 2016 on pace to outgrow 2015 by $1B+

Source: Momentum Partners, CB Insights, Pitchbook Data.

reaching over $1.2B; additionally, deal volume has reached a record number at 80 Deals in 3Q16



Although we saw a slow down in volume activity in September in comparison to July & August, deal value reached consistent levels MoM in Q316

Note: Data for 2014 – 2016 includes only deals with amounts raised >$1M.

47

Cybersecurity Startups And Investors List Of Most Well-Funded Startups And Most Active VC Investors. Most Well-Funded Cybersecurity Startups ($M) 302

Most Active Investors in Cybersecurity* 23

301

23

22

283

22

22

22

20 232

16

190

187

186

182

180

177

175

156

156

148

15

14

13

12

12

143



The top 15 most well-funded startups have raised $3.0B over their lifespan



Tanium continues to top the list of most well-funded just ahead of Tenable, having raised $212M in 2015 and over $300M since 2007



An additional 19 companies have raised between $100M and $140M for a total of $2.3B, including Digital Guardian ($135M), Netskope ($133M), Bracket Computing ($132M), Pindrop Security ($122M), Ionic Security ($122M), Skybox Security ($119M), Druva ($118M), Bromium ($116M), Darktrace ($105M)



Source: PitchBook Data, Crunchbase.

Among investors, Bessemer Venture Partners and New Enterprise Associates have become the most active investors as we reach the end of 3Q16, having invested in 23 companies each since 2010 



Bessemer and NEA’s notable investments in 3Q16 included Claroty & Virtru and Cyence & ThreatQuotient, respectively

Intel Capital, Sequoia Capital, Paladin Capital, Accel each followed with 22 investments, respectively * Investments in rounds with minimum size of $5 million.

48

11

Venture Capital Activity Venture Capital Raises >$10 Million Since Q3 2014. Investment Date

Selected Investor(s)

29-Sept-16

Baseline Ventures, EDB Investments, EPIC Ventures, GV, KPCB, Northern Light, Venrock

Shape Security stops automated web and mobile application attacks, like credential stuffing, content scraping, and application-layer DDoS, that bypass existing defenses.

28-Sept-16

Sequoia Capital, Blue Cloud Ventures, EDB Investments, Hercules Capital, Tenaya Capital

Druva Software provides data protection and governance solution for public and private clouds in an enterprise.

28-Sept-16

General Catalyst, Acero Capital, John Thompson, Paul Sagan, Ron Gula

Contrast Security develops application security software that stops hackers from stealing data through Web applications.

25-Sept-16

Thomvest Ventures, Greylock Partners, Sequoia Capital

Skyhigh Networks is a cloud access security company, enables companies to embrace cloud services with appropriate levels of security, compliance, and governance.

19-Sept-16

Grotech Ventures, Paladin Capital Group

White Ops provides online fraud detection solutions. It offers Real Time Dashboard, a solution that enables users to identify, track, and classify automated fraud in real time.

15-Sept-16

GGV Capital, Flybridge Capital Partners, Globespan Capital Partners, Menlo Ventures

BitSight provides a security rating platform, which analyzes external data on security behaviors that allows to manage third party risk, and benchmark performance.

13-Sept-16

Bessemer, ICV Capital, Innovation Endeavors, Marker, Mitsui, Red Dot Capital Partners

Claroty discovers the most granular elements. By extracting critical data, and formulating actionable insights, it provides visibility and brings unparalleled clarity to OT networks.

32.0

13-Sept-16

Greylock Partners, Aspect Ventures, Singtel Innov8, USVP, Gur Shatz, Shlomo Kramer

Cato Networks provides cloud-based platform to manage multiple hardware and software products and provide security against hacking, data theft and other security problems.

30.0

8-Sept-16

American Express Ventures, Menlo Ventures, TriplePoint Capital

Signifyd is a SaaS-based, enterprise-grade fraud technology solution for e-commerce stores.

8-Sept-16

NEA, Dowling Capital Management, IVP

Cyence has developed an economic cyber risk modeling platform quantifying cyber risk in probabilities and dollars.

30-Aug-16

Riverwood, Adams Street, Delta-v, EDB Investments, Exclusive Ventures, Siemens

LogRhythm provides log management and security information and event management solutions.

30-Aug-16

Millennium Technology Value Partners, Centana Growth Partners

Jumio is an identity management and credentials company that helps businesses reduce fraud and increase revenue by utilizing proprietary computer vision technology.

Company

Business Description

Source: Capital IQ, PitchBook Data, CrunchBase.

49

Amount Raised ($M) 40.0 51.0 16.0

40.0 20.0 40.0

19.0 40.0

50.0 15.0



25-Aug-16

Maverick Ventures, Arsenal, Bloomberg Beta, Data Collective, Divergent, Signia Venture

BlueTalon provides data-centric security for big data initiatives. It delivers precise, consistent and dynamic user access controls to data across Hadoop, Cassandra & SQL data platforms

16.0

24-Aug-16

Trinity Ventures, Bessemer Venture Partners, K9 Ventures, SVB

Auth0 is an identity-as-a-service that authenticates and authorizes apps/APIs with any popular identity provider running on any popular software stack on any popular device/cloud.

15.0

23-Aug-16

NEA, Blu Venture Investors, Center for Innovative Technology

ThreatQuotient offers a software platform that helps security teams mitigate cyber attacks by aggregating and managing intelligence on threats.

22-Aug-16

Bessemer, Blue Delta Capital, Haystack Partners, NEA, Quadrant Capital, Soros Fund

Virtru provides data encryption and digital privacy protection, keeping data sent online private for individuals and organizations.

18-Aug-16

Undisclosed

Bat Blue is a cloud security service that leverages a unique Globally Distributed Security Abstraction Layer (Global Seal) technology to deliver uniform and consistent security.

18-Aug-16

Trident Cyber, Peloton Equity, BlueCross BlueShield Venture, Sandbox Advantage

ID Experts provides software and services to organizations for managing cyber risks and data breaches, and to consumers to protect and restore their identities from identity theft.

11-Aug-16

Pelion Venture Partners, Square Peg Capital, Fenwick & West, IAG

UpGuard analyzes data about the state of corporate networks to devise a numerical score that gives a security risk score, used by insurance companies for cyber insurance.

8-Aug-16

Rally Capital, IDG Ventures, Ignition Partners

Tempered Networks is a security platform that enables organizations to rapidly deploy identitybased overlay networks to ‘cloak’ trusted endpoints, networks and assets.

3-Aug-16

Undisclosed

ThinAir keeps users safe by providing insight and protection against four key vectors of data breaches: Insider Threats, Criminal Adversaries, Data Exfiltration, and Human Error.

2-Aug-16

Bessemer Venture Partners, Foundry Group, SVB, Techstars

Distil’s SaaS bot detection and mitigation solutions work like a protective shield and blocks malicious bots, malware and competitors that try to scrape websites without permission.

27-Jul-16

Paladin Capital Group, Bessemer Venture Partners

PhishMe provides training to employees against phishing threats enabling them to identify, report, and mitigate spear phishing, malware and drive-by threats.

26-Jul-16

Accel (Series A), Ignition Partners (Series B), Elieses (Series B)

Acalvio provides Advanced Threat Defense (ATD) solutions to detect, engage and respond to malicious activity inside the perimeter.

Company



50

Amount Raised ($M)

12.0

29.0 13.5 27.5 17.0 10.0 15.0 21.3

42.5 17.0



Company


SafeBreach provides a “hacker's view” of an enterprise’s security posture to proactively predict attacks, validate security controls and improve SOC analyst response.

Amount Raised ($M)

26-Jul-16

Deutsche Telekom Partners, HP Pathfinder, Maverick Ventures, Sequoia, Shlomo Kramer

25-Jul-16

ABRY Partners, Insiders

19-Jul-16

Insight Venture Partners, Spark Capital, Union Square Ventures

Sift Science offers large-scale machine-learning technology services that help e-commerce businesses detect and fight fraud.

19-Jul-16

83North, Battery Ventures, Cisco Investments

GuardiCore provides network security solutions for software-defined data centers.

20.0

19-Jul-16

Foundation Capital, Shasta Ventures, New York Life Insurance, Pitango, Lane Bess

Skycure is a predictive mobile threat defense company that actively detects and prevents mobile cyberattacks while preserving user privacy and experience.

16.5

19-Jul-16

Accelerate IT Ventures, Grayhawk Capital, Benhamou Global, Generation Ventures

Blue Cedar Networks develops / operates Atlas platform, an end-to-end application security and connectivity solution to protect assets across the extended enterprise.

11.0

15-Jul-16

Santander Bank

Silent Circle is a global encrypted communications service that provides cutting-edge encrypted text, e-mail, mobile phone and video teleconferencing services.

13-Jul-16

Carrick Capital Partners, Comcast Ventures

Bay Dynamics develops automated cyber security and risk solutions for enterprises, by turning enterprise data into actionable information risk intelligence.

13-Jul-16

Vertex Ventures, Aspect Ventures, Magma Venture Partners, Shlomo Kramer

Indegy provides visibility and security for industrial control networks to ensure operational continuity and reliability.

12.0

12-Jul-16

Greycroft Partners, Bloomberg Beta, Cisco, Jump Capital, K2 Intelligence, Tech Operators

Flashpoint’s Deep & Dark Web data, expertise and technology enable organizations to glean intelligence that informs risk and protects their ability to operate.

10.0

7-Jul-16

AM Partners, VMS Investment Group

Post-Quantum, provides data confidentiality, authenticity, and access control solutions.

10.3

6-Jul-16

TenEleven Ventures, Rally Ventures, YL Ventures

Twistlock develops a security suite for virtual container security in enterprises that enables developers and security operations teams to keep container-based applications safe.

10.0

StackPath

15.0

StackPath is a web services platform that unifies enterprise security, leveraging collaborative intelligence to make each service smarter/more secure with every threat detected.


51

180.0 30.0

50.0 23.0



Company


Amount Raised ($M)

KKR, Hoxton Ventures, Softbank, Summit Partners, TenEleven Ventures

Darktrace’s Enterprise Immune System technology automatically detects and responds to emerging threats, powered by machine learning and mathematics from Univ. of Cambridge.

30-Jun-16

Undisclosed

StackRox offers a software that provides cyber security and cloud computing services for the enterprises.

10.0

28-Jun-16

Blackstone Ventures, Cisco Investments, Crosslink Capital, Rally Ventures

Verodin is defining the emerging concept of instrumented security, enabling customers to measure and continuously validate the cumulative effectiveness of layered security.

10.0

23-Jun-16

GV, Boldstart Ventures, Evolution Equity Partners, Sequoia Capital, Two Sigma

Security Scorecard provides a cybersecurity rating and continuous risk monitoring platform allowing enterprises to gain operational command of their security posture.

20.0

22-Jun-16

Access Industries, Amplify Partners, Battery Ventures, Glilot Capital, Shlomo Kramer

LightCyber provides behavioral attack detection solutions and the first to integrate user, network and endpoint context to provide security visibility into attack activity.

20.0

21-Jun-16

CRV

Zerto provides enterprise-class business continuity and disaster recovery solutions for virtualized infrastructure and cloud.

20.0

20-Jun-16

Delta-v Capital, LiveOak Venture Partners

NSS Labs is an independent, information security research and testing organization.

16.0

16-Jun-16

NEA, Wing

Tigera is solving networking and security problems inherent in deploying and enforcing policy in large private, public, and hybrid enterprise clouds.

13.0

8-Jun-16

Insight, Blackstone, Capital One, Ten Eleven, DFJ, KKR, Fairhaven, Khosla

Cylance utilizes artificial intelligence, algorithmic science and machine learning to proactively protect organizations against advanced threats.

7-Jun-16

FTV Capital

ReliaQuest is a pioneer in IT security solutions, ensuring that organizations remain secure and compliant as the IT world changes.

30.0

7-Jun-16

Warburg Pincus, Lazarus Israel Opportunities Fund, Sierra Ventures, Telstra Ventures

Zimperium is a mobile security startup that develops a mobile IPS to combat advanced modern cyber attacks on smartphones.

25.0

1-Jun-16

Amazon, Goldman Sachs, GV, Hayman Capital, Icon Ventures, KPCB, Meritech

Ionic Security, a data security platform, provides access control, intellectual property monitoring, data encryption, and policy management.

5-Jul-16


52

64.0

100.0

45.0



25-May-16

Transunion, Bessemer Venture, Firstmark Capital, Rho Ventures

Dashlane makes identity and payments simple and secure everywhere with its password manager and secure digital wallet.

22.5

24-May-16

Norwest, Greylock Partners, Alloy Ventures, Battery Ventures, First Round, Scale Venture

Agari leverages the company’s proprietary, global telemetry network and patent-pending predictive Agari Trust Analytics to identify and stop phishing attacks.

22.0

24-May-16

Redline Capital, Telstra Ventures, Work-Bench, Allegis, Citi Ventures, Highland Capital

vArmour provides software-defined security solutions for virtualized data centers and government cloud operators.

17-May-16

StageOne Ventures, Magma, Greenfield Cities Holdings

AVANAN is a stealth mode startup that offers enterprise-grade security for data in the cloud.

12-May-16

Sand Hill Ventures

Wickr is a secret messaging app allowing its users to send and receive top-secret messages, pictures, videos, audios, and files.

11-May-16

Fairhaven Capital, .406 Ventures, MassMutual Ventures, Ascent Venture Partners

Pwnie Express provides full threat detection of every wireless and wired device in and around your workplace.

28-Apr-16

Bain Capital, True Ventures, Venrock

Evident.io provides continuous cloud security for AWS, enabling rapid detection/remediation of risks, vulnerabilities, & compliance issues.

27-Apr-16

Helion Venture Partners, India Alternatives, Sistema Asia Fund, VenturEast

Seclore’s Enterprise Digital Rights Management solution enables organizations to control the usage of files wherever they go, both within and outside of organizations’ boundaries.

12.0

26-Apr-16

NewSpring Capital, Atlanta Equity, Flybridge Capital Partners, Jvax Investment Group

VidSys provides a physical security information management (PSIM) and converged security and information management (CSIM) software platform.

11.0

21-Apr-16

Institutional Venture Partners, General Catalyst, GV, Paladin Capital Group

Anomali’s platform is a security intelligence solution that aggregates millions of threat indicators into existing security systems.

21-Apr-16

Scale Venture Partners, NEA, Sequoia, Commerce Ventures, Eleven Two Capital

Forter's platform uses cyber intelligence combined with behavioral and identity analysis to help merchants spot fraudulent transactions.

20-Apr-16

Blackbird Ventures, Costanoa, Paladin, Rally Ventures, Salesforce, Industry Ventures

Bugcrowd's Crowdcontrol® platform safely orchestrates a flexible array of managed bug bounty, penetration test, and responsible disclosure offerings.

Company



53

Amount Raised ($M)

41.0

14.9 34.0 12.9 15.7

32.0

30.0 15.0



15-Apr-16

Scale Venture Partners, .406 Ventures

Threat Stack provides a fully integrated, cloud-native continuous monitoring solution that gives customers instant visibility and automatically responds to changes in their environment.

14-Apr-16

Idinvest Partners, Crunchfund, Wellington Foods

Onfido's identity verification software, powered by machine learning technology, verifies peoples identities before running further searches(i.e. Criminal/Anti-Money-Laundering).

13-Apr-16

Highland Capital Partners Europe, Auriga Partners, Galeo-Ventures, Waypoint Capital

Smarter IT through analytics. Captures all local and network activities in real-time across all endpoints and transforms end-user data into actionable analytics.

13-Apr-16

Advantech Capital, Qiming Venture, China Broadband, IDG Capital, Linear Venture

FraudMetrix develops online software solutions for anti-theft and fraud management applications in financial, insurance, payment, and online shopping.

11-Apr-16

Vertex Ventures, Data Collective, Andy Bechtolsheim

PerimeterX is a provider of behavior-based threat protection technology. Its PerimeterX Bot Defender, accurately protects commerce, media and enterprise websites from any attack.

7-Apr-16

ARBY Partners

Edgile provides strategic security and risk consulting services to Fortune 500 companies.

6-Apr-16

Drive Capital, Healthy Ventures, SVB, Khosla Ventures, Moonshots Capital, NCT Ventures

CrossChx is identity resolution for smarter healthcare, it creates a universal patient ID to organize healthcare data and enable a new breed of innovative applications.

24-Mar-16

A16z, Highland Capital, Intel Capital, Silver Lake Waterman, Lightspeed, Meritech Capital

Bromium’s endpoint protection solutions automatically create hardware-isolated micro-VMs that secure every user task.

15-Mar-16

GV, Cisco, Index Ventures, Intel Capital, Northgate, Sutter Hill Ventures, Thomvest

Skyport Systems develops Hyper-Secured Infrastructure that ensures the security of mission-critical IT assets, with tight integration of compute, security, virtualization and policy.

14-Mar-16

Pelion Venture Partners, Madrona Venture Group

ICEBRG is a stealth network security company.

25-Feb-16

Menlo Ventures, QED Investors, IA Ventures, Allegis Capital, Tim Eades, Bill McKiernan

Signifyd is a SaaS-based, enterprise-grade fraud technology solution for e-commerce stores.

23-Feb-16

Accenture, AT&T, Nokia, Temasek Holdings, Cisco, Bessemer, Innovation Endeavors,

Team8 is an incubator for cyber-security firms with specialty in defending against targeted, human-driven cyber-attacks

Company



54

Amount Raised ($M) 15.4 25.0 40.0 32.0 12.0 35.0 15.5 40.0 30.0 10.0 20.0 23.0




Amount Raised ($M)

17-Feb-16

Qihoo 360 Technology, Shanghai Ziyou Investment Management

360 Security provides mobile security applications.

100.0

10-Feb-16

Qumra Capital, Entree Capital, Genesis Partners, Phoenix Insurance, NTT DOCOMO

Riskified operates a technology platform for online merchants that is used to prevent fraudulent and other transactions of risk.

25.0

10-Feb-16

Sutter Hill Ventures, Clear Venture Partners, Battery Ventures, Amplify Partners

Vera operates as a data-security company that enables enterprises, IT organizations, and end-users to secure and share digital information across platforms and devices.

21.0

9-Feb-16

Trinity Ventures, Ten Eleven Ventures, Storm Ventures, Passion Capital

Digital Shadows provides cyber situational awareness that helps organizations protect against cyber attacks, loss of intellectual property, and loss of brand integrity.

14.0

4-Feb-16

Silver Lake Partners

Symantec is a global provider of security and systems management solutions that help businesses and consumers secure and manage their information and identities.

4-Feb-16

Goldman Sachs, Accel, NEA, Bay Partners, Hummer Winblad, Morgenthaler Ventures

Sonatype helps development organizations intelligently source, manage, assemble, secure and maintain open source and third-party components.

3-Feb-16

Providence Equity Partners

Skybox Security provides integrated security solutions that provide visibility of exploitable attack vectors, hot spots of vulnerabilities, network misconfigurations and risky firewall rules.

3-Feb-16

Cisco, Edison Partners, Georgian Partners, VentureLink, Northleaf Capital Partners

eSentire protects mid-sized organizations from sophisticated cyber threats in real-time 24/7 by leveraging behavioral, reputational and signature-based capabilities.

19.5

3-Feb-16

NA

Carbon Black provides endpoint threat detection, response, and prevention solutions to detect and stop cyber threats.

14.0

1-Feb-16

Foundation Capital, Eddy Shalev, Gilat Opponent

Kaymera provides military-grade cyber defense solutions for mobile devices.

10.0

28-Jan-16

Google Capital, IVP, Felicis Ventures, A16z, Citi Ventures, GV

Pindrop Security provides caller-ID products to detect, report, and mitigate phone fraud.

26-Jan-16

Lightspeed Venture Partners, Norwest Venture Partners, SingTel Innov8

Fireglass’ Threat Isolation Platform eliminates common attack vectors against browsers, emails, documents and web applications.

Company


55

500.0 30.0 96.0

80.6 20.0



21-Jan-16

Wellington Management

ForeScout enables organizations to continuously monitor and mitigate security exposures and cyber attacks

21-Jan-16

Fidelity Investments

Malwarebytes develops anti-malware technologies to detect and remove malicious programs from PCs.

20-Jan-16

Global Emerging Markets Limited

WISeKey develops online security and identity management solutions worldwide.

13-Jan-16

TA Associates

StorageCraft provides best-in-class backup, disaster recovery and business continuity solutions for servers, desktops and laptops.

13-Jan-16

IVP, 83North, Battery Ventures, Harmony Partners, USVP, ClalTech, RTP Ventures

Zerto provides enterprise-class disaster recovery and business continuity software for virtualized data centers and cloud environments.

31-Dec-15

Blue Coat, Knollwood Investments, Venrock, USVP

Appthority develops application security solutions that help businesses identify the risks hidden inside mobile applications.

10.0

16-Dec-15

Trustbridge Partners, Danhua Capital, Linear Capital Partners, Sparkland Ventures

Trustlook develops a static analysis platform for detecting suspicious behavior and malicious characteristics for Android operating systems.

17.0

16-Dec-15

Brookline Venture Partners, Fairhaven Capital Partners, GE Pension Trust, LLR Partners

Digital Guardian provides data security solutions to protect data from insider and outsider threats.

15-Dec-15

American Express Ventures, BDC Venture Capital, Blumberg Capital, Tenfore Holdings

Trulioo provides online portal for identity verification services.

11-Dec-15

NewSpring Capital, Alsop Louie Partners, Neuberger Berman

Lookingglass Cyber Solutions develops cyber threat intelligence monitoring and management platforms.

9-Dec-15

Amadeus Capital Partners, Aspect Venture Partners, Bain Capital Ventures

ForeScout enables organizations to continuously monitor and mitigate security exposures and cyber attacks.

3-Dec-15

Core Capital Partners, Genacast Ventures, Highland Capital Partners, NEA, SVB

ZeroFOX provides real-time social threat analytics, intelligence, and advanced security protection via its cloud-based cyber platform.

Company



56


61.0 187.0 50.0

66.0 15.0 50.0 75.4 27.0



2-Dec-15

JMI Equity

Avecto's Defendpoint software protects endpoints from malware and cyberattacks through privilege management, application control and sandboxing technology.

2-Dec-15

Blu Venture Investors, NEA, Center for Innovative Technology

ThreatQuotient offers a software platform that helps security teams mitigate cyber attacks by aggregating and managing intelligence on threats.

10.2

1-Dec-15

Grotech Ventures, SAP National Security Services

ThreatConnect provides a cyber threat intelligence platform that allows global organizations to manage massive amounts of threat information.

16.0

1-Dec-15

Alibaba, GE Ventures, Jérusalem Venture Partners, Poalim Ventures

Theta Ray offers malware detection and prevention solutions for critical infrastructure, communication systems, and financial systems.

20.0

17-Nov-15

Tola Capital, Arsenal Venture, Crosslink Capital, Paladin Capital, Trinity Ventures

ProtectWise offers cloud-based network security services.

20.0

11-Nov-15

Menlo Ventures, Jerusalem Venture Partners, OurCrowd, Draper Nexus

AppDome’s dynamic wrapping SaaS technology provides shield to enterprise and consumerfacing apps from advanced cyber threats, mobile fraud, and data theft.

13.0

11-Nov-15

Norwest Venture Partners, Invus Group, Accolade Partners, Shasta Ventures, REV

TigerText provides security software for text messaging for physicians to use on their mobile devices.

10-Nov-15

Insight Venture Partners, Accel Partners

Tenable Network Security specializes in developing software that enables real-time network monitoring to detect hackers and other malicious actors.

9-Nov-15

Costanoa Ventures, Foundation Capital, Split Rock Partners, Triangle Peak Partners

Guardian Analytics is provider of fraud prevention software for protecting online channels and accounts.

3-Nov-15

Goldman Sachs

iboss Cybersecurity provides innovative APT Defense, Web Security and Mobile Security Solutions.

2-Nov-15

Foundation Capital, Matrix Partners, Northbridge Venture Partners

Confer provides endpoint detection and response solution (EDR) that proactively identifies attacks and provides real-time visibility across all endpoints.

17.0

30-Oct-15

Merck Global Health Innovation Fund

Exostar develops B2B information sharing software.

15.0

Company



57


50.0 250.0 10.9 35.0




Amount Raised ($M)

29-Oct-15

Undisclosed

Lumeta provides network situational awareness platform which is source for enterprise network infrastructure and cybersecurity analytics.

13.0

27-Oct-15

Aspect Venture Partners, US Venture Partners

Cato Networks provides cloud-based platform to manage multiple hardware and software products and provide security against hacking, data theft and other security problems.

27-Oct-15

Index Ventures, Storm Ventures

SourceClear develops software security platform for developers that help organizations identify components across software portfolio.

25-Oct-15

Trident Cybersecurity, KPCB

IronNet Cybersecurity provides suite of technologies that provide real-time threat assessment and updates and consulting services.

14-Oct-15

Icon Ventures, Allegis Capital, Cowboy Ventures, KPCB, First Round Capital

Area 1 Security provides campaign delivery systems and allows enterprises to identify cyber attacks and other attacking campaigns before they unfold using their anti phishing platform.

14-Oct-15

.406 Ventures, Accomplice, KPCB, Highland Capital, Evolution Equity Partners

Carbon Black provides endpoint threat detection, response, and prevention solutions to detect and stop cyber threats.

14-Oct-15

Fidelity Management, Goldman Sachs, Allegis Capital, A16z, NVP, Sutter Hill, GE, ARTIS

Bracket Computing’s Virtual Infrastructure Software spans multiple heterogeneous clouds with one set of advanced security, data management, and networking infrastructure.

13-Oct-15

GSR Ventures, NEA

DataVisor provides big data security analytics to help protect consumer-facing websites and mobile apps from cyber criminals.

13-Oct-15

Charles River Ventures, Softbank, Spark Capital

Cybereason delivers a technology platform that automatically uncovers malicious operations, reconstructing them as a clear image of a cyberattack in context.

7-Oct-15

Third Point, Granite Hill, SineWave Ventures, Data Collective, Tiger Global, UpWest

Sentinel One uses predictive execution inspection to detect and protect all devices against targeted zero day threats in real-time.

6-Oct-15

JMI Equity, NEA, Split Rock Partners, Accel Partners,

Code42 Software provides secure cloud services for endpoint data protection and security that allow their users to limit risk, meet data privacy regulations, and recover from data loss.

30-Sep-15

KPMG

Norse delivers continuously-updated and unique Internet and darknet intel that helps organizations detect and block attacks.

Company


58

20.0

10.0 32.5 15.0 54.5 46.4 14.5 59.0 25.0 85.6 11.4



29-Sep-15

DAG Ventures, AME Cloud Ventures, Juniper Networks, Intel Capital, IA Ventures, Accel

Vectra Networks’ X-series platform uses next-gen compute architecture and combines data analytics and machine learning to detect attacks.

29-Sep-15

Icon Ventures, Aspect Ventures, Shlomo Kramer, Norwest Venture Partners

Exabeam offers machine-learning technology that focuses on cyber attacker behavior to detect modern cyber attacks.

25-Sep-15

Arsenal Venture, EDB Investments, Fairhaven Capital Partners, Ten Eleven Ventures

CounterTack provides real-time endpoint threat detection and response solutions to enterprises and government organizations.

22-Sep-15

Fidelity Management, Baidu, Qualcomm Ventures, Microsoft, NEA, Google, Venrock

CloudFlare is a web performance and security company that provides online services to protect and accelerate websites online.

21-Sep-15

Orchard Holdings Group

Morphick team has developed the only proven platform-enabled managed service to enable their customers to prevent, detect, and respond to even the most advanced attacks.

17-Sep-15

Tano Capital

Tascent develops and deploys biometric identity products and solutions based upon a strong heritage in iris recognition and multimodal high throughput and mobile biometrics.

10-Sep-15

Allianz Digital Corp Ventures, Vertex, Magma Venture, SBI Holdings, Allianz, Magna Int’l

Argus is an automotive cybersecurity pioneer, helping car manufacturers, their Tier I suppliers and aftermarket connectivity providers protect connected cars.

10-Sep-15

IVP, TPG, Andreessen Horowitz, T. Rowe Price

Tanium provides security and systems management solutions to allow real-time data collection.

8-Sep-15

Andreessen Horowitz, Greylock, Sequoia, Altimeter Capital, Glynn Capital, Khosla

Okta is an integrated identity and mobility management service.

75.0

3-Sep-15

ICONIQ, Accel Partners, Lightspeed, Social+Capital Partnership

Netskope performs deep usage analytics and enforces business and security policies in cloud apps.

75.0

2-Sep-15

Bessemer Venture Partners, Citi Ventures, Innovation Endeavors, Marker, NEA

Illusive networks offers deception technology enabling protection against targeted attacks and APTs.

22.0

Evolution Equity Partners, .406 Ventures, Arsenal Venture Partners

Onapsis provides solutions for securing business-critical applications and infrastructure.

17.0

25-Aug-15

Company



59


17.9 108.7 10.0 18.5 26.0 147.5



24-Aug-15

Bessemer Venture Partners, Thomas Noonan

Bastille is pioneering IoT security with next-generation security sensors and airborne emission detection, allowing corporations to accurately quantify risk and mitigate threats.

19-Aug-15

Lightspeed, Benchmark, Meritech Capital, Shasta Ventures, Tenaya Capital, Musea

CloudPassage provides server security products for public and hybrid cloud hosting environments.

18-Aug-15

IVP, GGV Capital, KPCB, Trident Capital

AlienVault’s Unified Security Management Platform delivers a unified, simple and affordable solution for threat detection, incident response and compliance management.

3-Aug-15

Google Capital, TPG Capital, EMC, Lightspeed Venture Partners

Zscaler offers integrated, cloud-delivered Internet security including web security, firewalls, mobile security, IoT security and DLP.

28-Jul-15

DFJ Growth, Dell Ventures, KKR, Blackstone, Thomvest, Khosla, Draper Nexus, TenEleven

Cylance utilizes artificial intelligence, algorithmic science and machine learning to proactively protect organizations against advanced threats.

24-Jul-15

Accelerate IT Ventures, Trident Capital, Panasonic Venture Group

Mocana creates and develops mobile application protection (MAP) app-shielding solutions, enabling users to secure mobile apps.

14-Jul-15

Summit Partners


13-Jul-15

Accel Partners, Google Capital, Rackspace, Warburg Pincus

CrowdStrike is a global provider of security technology and services focused on identifying advanced threats and targeted attacks.

13-Jul-15

Blackstone, Allegis Capital, Marc Benioff, Igor Sill, Kevin Plank, Christian Lawless

RedOwl Analytics provides proactive risk oversight software solutions for compliance, insider threat & investigations.

1-Jul-15

Pinnacle Ventures, Redpoint eVentures, Quihoo 360 Technology

PSafe is a Brazilian company developing Secure Cloud Computing software suites such as the PSafe Antivirus for safe internet browsing.

25-Jun-15

Insight Venture Partners

CheckMarx.com develops software solutions that are used to identify security vulnerabilities in Web and mobile applications.

24-Jun-15

NEA, Benchmark, New Enterprise Associates, Marc Benioff, David Sacks, Drew Houston

HackerOne provides a vulnerability management and bug bounty platform.

Company



60


52.0 110.0 42.0 14.8 25.0 100.0 17.5 30.0 84.0 25.0




Amount Raised ($M)

24-Jun-15

New Enterprise Associates, Sigma Prime Ventures

Barkly uses high-performance local analytics and a unique design to stop attacks in the moment while preventing tampering from users and attackers.

12.5

18-Jun-15

Bessemer Venture Partners, Correlation Ventures, IDEA Fund Partners, Techstars

Distil’s SaaS bot detection and mitigation solutions work like a protective shield and blocks malicious bots, malware and competitors’ that try to scrape websites without permission.

9-Jun-15

Intel Capital, QuestMark Partners, Silver Lake Partners

Venafi provides enterprise key and certificate management security solutions – the Immune System for the Internet™.

8-Jun-15

Sutter Hill Ventures, Engineering Capital, General Catalyst, Osage University Partners

Menlo Security is a stealth cyber security company that develops security solutions eliminating the threat of advanced malware.

1-Jun-15

Sapphire Ventures, Foundation Capital, Matrix Partners, Trinity Ventures, Chris Rust

Cyphort develops cloud services, software, and appliance-based solutions to protect enterprises against the newest cyber threats.

1-Jun-15

DFJ Growth, Accel, Glynn Capital, Greylock, IVP, Sequoia, Sutter Hill, Tenaya Capital

Sumo Logic is a log management and analytics company that leverages Big Data for real-time IT insights.

28-May-15

Excel Venture Management, Flare Capital, Heritage Group, HLM Venture, NVP, Merck

ClearDATA offers security, privacy, and compliance services to the hospitals, physician practices, electronic medical record software, and healthcare markets.

20-May-15

Carmel Ventures, Lightspeed Venture Partners

enSilo offers a real-time targeted attack exfiltration prevention platform.

19-May-15

China Broadband Capital Partners, China Growth Capital, IDG Capital Partners

FraudMetrix develops online software solutions for anti-theft and fraud management applications in financial, insurance, payment, and online shopping.

19-May-15

Andreessen Horowitz, Corazon Capital

Keybase allows users to easily encrypt, decrypt and share messages within a tried-and-tested encryption standard.

18-May-15

Oak HC/FT, Espirito Santo Ventures, Sapphire Ventures

Feedzai provides a platform that uses real-time, machine-based learning to help payment networks, banks and retailers prevent fraud in omnichannel commerce.

18-May-15

Comcast Ventures, Commonwealth Capital, Flybridge Capital, Globespan Capital, Menlo

BitSight provides a security rating platform, which analyzes external data on security behaviors that allows to manage third party risk, and benchmark performance.

Company


61

21.0 39.0 25.0 30.0 80.0 25.0 10.0

30.0 10.8 17.5 23.0



6-May-15

Spark Capital, CRV, Lockheed Martin

Cybereason delivers a technology platform that automatically uncovers malicious operations, reconstructing them as a clear image of a cyberattack in context.

16-Apr-15

Reed Elsevier Ventures, Atlas Venture, Balderton Capital, GV, IA Ventures, In-Q-Tel

Recorded Future arms organizations with real-time threat intelligence, allowing them to proactively defend against cyber attacks.

15-Apr-15

Index Ventures, Intel Capital, Sutter Hill Ventures

Skyport Systems develops Hyper-Secured Infrastructure that ensures the security of mission-critical IT assets, with tight integration of compute, security, virtualization and policy.

30.0

14-Apr-15

HP Ventures, Index Ventures, Sequoia Capital, Rembrandt

Adallom is a cloud access security broker which delivers visibility, governance and protection for cloud applications.

30.0

14-Apr-15

Accel Partners, Andreessen Horowitz, BlackRock, General Catalyst, Formation 8

llumio provides cloud solutions, specializing in virtualization, networking, and security hailing services.

9-Apr-15

Venrock, Index Ventures, New Enterprise Associates

Niara's solution blends diverse data sources, sophisticated analytics and forensics to discover compromised users and provide insight into malicious insiders.

8-Apr-15

Andreessen Horowitz, Citi

Tanium provides security and systems management solutions to allow real-time data collection.

6-Apr-15

DRW Investors, Icon Ventures, Leapfrog Ventures, Math Venture Partners

RedSeal develops security risk management (SRM) software and solutions and helps companies eliminate cyber threats.

1-Apr-15

AITV, Cisco, EPIC Ventures, Trident Capital, Vanedge Capital, Vmware, Fortinet

HyTrust, a cloud security automation company, provides administrative control, auditing, & data security for private, hybrid, and public clouds.

26-Mar-15

Aldrich Capital Partners, Paladin Capital

PhishMe provides training to employees against phishing threats enabling them to identify, report, and mitigate spear phishing, malware and drive-by threats.

26-Mar-15

Accel Partners, Flybridge Capital Partners, Greycroft Partners, Millenium Technology

BetterCloud provides critical insights, automated management, and intelligent data security for cloud office platforms.

25.0

25-Mar-15

Neuberger Berman Group, Alsop Louie Partners, Peninsula Ventures

Lookingglass Cyber Solutions develops cyber threat intelligence monitoring and management platforms.

20.0

Company



62


12.0

100.0 20.0 64.0 17.0 33.0 13.0



24-Mar-15

Bain Capital Ventures, Commerce Ventures, Lightspeed Venture Partners

InAuth is the most complete mobile authentication and anti-fraud solution offering multiple security options to financial institutions and the mobile transaction market.

20-Mar-15

August Capital, Engineering Capital, Norwest Venture Partners, Wing Venture Partners

Palerra provides software that combines threat detection, predictive analytics, security configuration management and automated incident response & remediation in one platform

17.0

19-Mar-15

ONSET Ventures, Voyager Capital, Presidio Ventures, LDV Partners, Envision Ventures

Vidder mitigates network-based attacks by making servers invisible to everyone except authorized users.

12.0

19-Mar-15

Redpoint Ventures, Benchmark Capital, GV, Lead Edge Capital, Radar Partners

Duo Security provides two-factor authentication as a service to prevent account takeover and data theft.

18-Mar-15

Invoke Capital, Hoxton Ventures, Talis Capital


3-Mar-15

Benhamou Global Ventures, Cybernaut Venture Capital, Lakewood & Company

IdentityMind Global provides an on-demand platform offering next generation risk management and anti-fraud services for the e-commerce ecosystem.

10.8

10-Mar-15

Allegis Capital, March Capital Partners, The Hive

E8 Security helps enterprises analyze and detect advanced attacks and malicious insider activities.

10.7

26-Feb-15

Undisclosed

Silent Circle is a global encrypted communications service that provides cutting-edge encrypted text, e-mail, mobile phone and video teleconferencing services.

26-Feb-15

Telstra Ventures, Sierra Ventures, Samsung Ventures, Lazarus Israel, Toyo Corporation

Zimperium, a mobile cyber security company, develops Mobile Intrusion Prevention System.

25-Feb-15

Wing Venture Capital, Norwest Venture Partners

Dtex Systems develops and provides secure user activity solutions.

25-Feb-15

Rogers Venture Partners, Blue Sky Capital

SecureKey develops platform-as-a-service based hardware and software solutions for chip-based identity and payment technologies.

18-Feb-15

Institutional Venture Partners, Andreessen Horowitz, Felicis Ventures, Redpoint, Citi

Pindrop Security provides caller-ID products to detect, report, and mitigate phone fraud.

Company



63


30.0 18.4

50.0 12.0 15.4

19.0 35.0



17-Feb-15

BOLDStart Ventures, Evolution Equity Partners, Sequoia Capital

SecurityScorecard is a provider of security risk assessment service for cloud-based information systems.

13.7

10-Feb-15

Alcatel Lucent, Bessemer Venture Partners, Cisco, Innovation Endeavors, Marker

Team 8 is an incubator for cyber-security firms with specialty in defending against targeted, human-driven cyber-attacks.

18.0

10-Feb-15

83North, Bessemer Venture Partners

Wandera provides security and management of mobile data for global enterprises.

15.0

26-Jan-15

Bessemer Venture Partners, Columbia Capital

Verato helps rightly identifying individuals regardless of whether their names, addresses or other personal information was incorrect or out-of-date.

16-Jan-15

Avalon Ventures, NHN Investment Corp

Air Computing cloud platform AeroFS allows enterprise customers to synch and share all data securely behind a firewall with unlimited storage.

13-Jan-15

KPCB, Meritech Capital Partners, Icon Ventures, Google Ventures, TechOperators

Ionic Security, a data security platform, provides access control, intellectual property monitoring, data encryption, and policy management.

31-Dec-14

Bessemer Venture Partners

iSight Partners provides cyber threat intelligence solutions to public sector and commercial entities.

19-Dec-14

GGV Capital, Icon Ventures, KPCB, Google Ventures, Greylock Partners,

Synack provides a cloud-based platform that enables customer data integrity, privacy, and confidentiality.

25.0

16-Dec-14

Scale Venture Partners, Charles River Ventures, Social+Capital Partnership

OneLogin's cloud-based Identity and Access Management solution allows enterprises of all sizes to secure their cloud and on-premise apps for all users and devices.

25.0

16-Dec-14

ATA Ventures, Northgate Capital, RWI Ventures, TVC Capital

EdgeWave engages itself in the design, development and marketing of internet security appliances, services and offers secure content management and policy compliance services.

16-Dec-14

Technology Crossover Ventures, Bain Capital Ventures

Rapid7 provides vulnerability management and security data and analytic software solutions and services.

9-Dec-14

Grotech Ventures, Khosla Ventures, Citi Ventures

DB Networks provides behavioral analysis solutions for intrusion detection and database security.

Company



64

Amount Raised ($M)

12.5 10.0 40.1 30.0

13.0 31.0 17.0



9-Dec-14

DCM, DDS, DoCoMo Capital, ONSET Ventures, Raven Venture Partners and others

Nok Nok Labs develops products and services for online security and authentication.

8-Dec-14

Summit Partners, Battery Ventures, Florence Venture Partners

RiskIQ provides a software-as-a-service product that eliminates online and mobile threats.

8-Dec-14

Auriga Partners, VI Partners, Mannai Corp

Nexthink is the innovator of End-user IT Analytics for security, ITSM and workplace transformation.

14.5

4-Dec-14

General Catalyst Partners, Palladin Capital, Google Ventures, IVP

Anomali’s platform is a security intelligence solution that aggregates millions of threat indicators into existing security systems.

22.5

19-Nov-14

Transamerica Ventures, T-Venture, Delta Partners, Andreessen Horowitz

CipherCloud provides cloud information protection solutions.

19-Nov-14

Bessemer, Columbia Capital, KPCB, Paladin Capital, Top Tier, Edgemore Capital, Savano

Endgame provides security intelligence and analytics solutions for real-time visibility and actionable insight across their digital domains.

18-Nov-14

General Catalyst Partners, Osage Partners

Menlo Security, a stealth cyber security company, develops a security solution that eliminates the threat of advanced malware.

10.5

18-Nov-14

IPV Capital, ANT Financial

V-Key provides mobile application threat research, protection, and intelligence solutions.

12.0

18-Nov-14

Battery Ventures, Amplify Partners, Chris Rust, Nick Mehta

Vera operates as a data-security company that enables enterprises, IT organizations, and end-users to secure and share digital information across platforms and devices.

14.0

11-Nov-14

NEA, Sequoia Capital, Commerce Ventures, Eleven Two Capital

Forter's platform uses cyber intelligence combined with behavioral and identity analysis to help merchants spot fraudulent transactions.

15.0

22-Oct-14

Benhamou Global Ventures, Javelin Venture Partners, Lakewood & Co, Vital Venture

Spikes Security provides browser-based security software solutions to businesses.

12.0

Total Amount Raised ($M)

7,048.1


Company


Median Amount Raised ($M)

65


50.0 30.0

21.6

Cybersecurity Public Trading Analysis

Cybersecurity Sector vs Benchmark Performance Equity Performance Continued to Rebound through Q3 2016.

120

3 Months

6 Months

12 Months

High Growth

21.2%

16.5%

(2.6%)

Low Growth

10.2%

4.8%

(0.8%)

NASDAQ

9.7%

9.1%

15.0%

S&P 500

3.3%

5.1%

12.9%

HACK*

16.8%

17.2%

10.5%

15.0% 12.9% 10.5%

110

-2.6%

100

-0.8%

90 80 70 60 Sep-15

Oct-15

Nov-15 High Growth

Dec-15

Jan-16 Low Growth

Feb-16

Mar-16 S&P 500 Index

Source: Capital IQ, market data as of September 30, 2016. * PureFunds ISE Cybersecurity ETF.

67

Apr-16

May-16

Jun-16

Jul-16

NASDAQ COMPOSITE INDEX

Aug-16 HACK

Sep-16

Cybersecurity Multiples Have Rerated Public Market Valuations for Cybersecurity Have Compressed Considerably Over The Past 12 Months. Max 12.9x

Company

34.3% Reduction

Max 8.6x

Median 7.6x

Median 5.0x

Min 0.9x

0.3% Reduction Min 0.9x EV / 2015E Revenue Multiple as of 9/30/15

EV / 2016E Revenue Multiple as of 9/30/16

68

EV/2015E Revenue

EV/2016E Revenue

% Change

1.8x

3.3x

78.7%

2.0x

3.4x

71.4%

4.9x

5.7x

16.9%

0.9x

0.9x

0.3%

9.1x

8.5x

6.3%

8.1x

6.9x

13.8%

3.6x

2.8x

23.4%

8.8x

6.7x

23.5%

9.9x

7.5x

24.0%

8.3x

6.0x

27.9%

12.9x

8.6x

33.0%

6.4x

4.2x

33.6%

7.1x

3.2x

55.2%

10.9x

4.2x

61.0%

Severe Decline In Correlation Of Value To Growth Public & M&A Markets Value Profit & Predictability Over Growth (Back to Basics). Palo Alto Networks $14,475 mn

10.0x Proofpoint $3,146 mn

9.0x 8.0x

Splunk $7,895 mn Check Point $13,308 mn

EV / Revenue 2016E

7.0x

6.0x

Imperva $1,752 mn Symantec $15,623 mn

5.0x

Sophos $1,582 mn

4.0x

Cyberark $1,664 mn

Qualys $1,351 mn Mimecast $1,042 mn

Fortinet $6,377 mn

Barracuda Networks $1,328 mn

TrendMicro $4,758 mn

FireEye $2,499 mn

3.0x F-Secure $592 mn

2.0x 1.0x

Rapid7 $742 mn

SecureWorks $1,009 mn

MobileIron $236 mn

0.0x 0%

5%

10%

15%

20%

25%

30%

35%

40%

2015-16E Revenue Growth

High Growth Cybersecurity

Low Growth Cybersecurity

Note: Size of the bubble indicates Market Cap. In USD; Market data as of September 30, 2016. Source: Capital IQ.

69

R2 3Q16: 25.6%

2Q16: 23.1%

1Q16: 23.6%

4Q15: 29.2%

3Q15: 63.2%

2Q15: 68.4%

Trading Multiples: High Growth & Low Growth Valuation Multiples For High Growth & Low Growth Cybersecurity Companies. EV / 2016E Revenue

EV / 2017E Revenue

8.6x 8.5x 7.5x 6.9x

6.7x 5.7x

5.7x

6.6x 6.5x

6.0x

Median: 5.7x

6.6x

5.9x

5.5x

Median: 4.8x 4.8x

4.2x 4.2x

Median: 3.3x

5.0x

4.7x

3.6x 3.5x 3.4x 3.3x 3.2x 2.8x 2.8x 2.7x

Median: 2.8x 3.5x

3.2x 3.1x 3.1x

3.4x

2.1x

1.8x

2.8x 2.8x 2.6x 2.6x 2.3x

0.9x

PANW

PFPT

SPLK

CYBR

MIME

QLYS

FTNT

RPD

SCWX

CHKP

IMPV

SOPH

BLOX

CUDA

SYMC

FEYE

TREND

FSC1V

VDSI

0.8x

MOBL

PFPT

PANW

SPLK

CYBR

QLYS

MIME


FTNT

RPD

SCWX

CHKP

IMPV

CUDA

SOPH

Blox

SYMC

FEYE

FSC1V

TREND

VDSI

MOBL


40% 38% 37% 37% 32%

32%

Median: 32% 27% 25% 21% 21%

29% 28%

24%

27% 23% 23%

16% 11% 10%

RPD

PANW

SPLK

PFPT

CYBR

FTNT

SCWX

MIME

QLYS

TREND

FEYE

Median: 23% 20% 19% 19%

CUDA

FSC1V

20% 17%

15% 15% 15% 15%

Median: 7%

8%

7%

7%

6%

6%

MOBL

SOPH

IMPV

SYMC

CHKP

BLOX

VDSI

PANW

PFPT

SPLK

(3%)

High Growth Source: Capital IQ, market data as of September 30, 2016. High Growth represented by companies with >20% revenue CAGR; Low Growth represented by companies with 20% CAGR) Palo Alto Networks

159.33

(7.2%)

14,475

13,698

37.9%

32.0%

8.6x

6.5x

40.9x

26.8x

76.7x

Splunk

58.68

4.9%

7,895

6,874

36.8%

28.2%

7.5x

5.9x

NM

52.6x

NM

NM

Fortinet

36.93

(14.2%)

6,377

5,393

26.7%

18.9%

4.2x

3.5x

23.3x

18.5x

52.8x

42.2x

Proofpoint

74.85

23.2%

3,146

3,090

36.8%

29.0%

8.5x

6.6x

NM

70.5x

NM

NM

CyberArk

49.57

(3.1%)

1,664

1,427

32.2%

22.5%

6.7x

5.5x

26.0x

21.4x

46.5x

38.6x

Qualys

38.19

29.0%

1,351

1,137

20.6%

18.7%

5.7x

4.8x

17.7x

14.6x

48.5x

41.4x

Mimecast*

19.13

91.3%

1,042

939

21.2%

22.6%

5.7x

4.7x

NM

65.9x

NM

NM

Secureworks*

12.51

(10.6%)

1,009

896

25.3%

19.5%

2.1x

1.8x

NM

NM

NM

NM

Rapid7

17.65

(20.7%)

742

658

40.1%

26.6%

4.2x

3.4x

NM

NM

NM

NM

Mean

30.8%

24.2%

5.9x

4.7x

27.0x

38.6x

56.1x

42.6x

Median

32.2%

22.6%

5.7x

4.8x

24.7x

26.8x

50.6x

41.8x

12,709 11,981 3,530 2,306 1,496 1,816 1,208 1,166 564 500 151 Mean

6.1% 5.8% 23.6% 15.8% 6.6% 7.4% (3.2%) 10.5% (13.0%) 10.4% 7.9% 7.1%

16.9% 5.9% 7.6% 15.3% 20.3% 14.8% 14.5% 6.2% 15.3% 6.8% 11.0% 12.2%

3.3x 6.9x 2.8x 3.2x 6.0x 3.6x 3.5x 3.4x 2.7x 2.8x 0.9x 3.6x

2.8x 6.6x 2.6x 2.8x 5.0x 3.1x 3.1x 3.2x 2.3x 2.6x 0.8x 3.2x

10.3x 12.7x 9.1x NM NM 26.0x 20.2x 18.7x 16.9x 18.3x NM 16.5x




7.4%

14.5%

3.3x

2.8x

17.6x

13.5x

29.5x

28.2x

Low Growth Cybersecurity (20% CAGR) Palo Alto Networks Splunk Fortinet

Low Growth Security (< 20% CAGR) Symantec

2016E

2017E

19%

21%

24%

7%

9%

11%

291

17%

18%

19%

25

44

2%

7%

9%

45

55

67

28%

26%

26%

18.7%

57

64

78

34%

32%

33%

22.6%

NA

7

14

NA

4%

7%

25.3%

19.5%

NA

(29)

1

NA

(7%)

0%

196

40.1%

26.6%

(29)

(32)

(29)

(26%)

(21%)

(15%)

$3,626

$3,847

$4,496

6.1%

16.9%

$1,709

$1,234

$1,669

47%

32%

37%

Check Point Software

1,630

1,725

1,826

5.8%

5.9%

938

946

1,003

58%

55%

55%

Trend Micro

1,034

1,278

1,375

23.6%

7.6%

322

389

424

31%

30%

31%

FireEye

623

722

832

15.8%

15.3%

(172)

(91)

25

(28%)

(13%)

3%

Sophos

472

507

582

7.4%

14.8%

NA

70

84

NA

14%

14%

Imperva

234

250

301

6.6%

20.3%

9

(18)

(2)

4%

(7%)

(1%)

Infoblox

355

344

393

(3.2%)

14.5%

52

60

76

15%

17%

19%

Barracuda Networks

309

341

362

10.5%

6.2%

64

62

69

21%

18%

19%

VDSI

241

210

242

(13.0%)

15.3%

57

33

47

24%

16%

19%

F-Secure

160

177

189

10.4%

6.8%

31

27

33

19%

15%

18%

MobileIron

149

161

179

7.9%

11.0%

(52)

(33)

(16)

(35%)

(21%)

(9%)

Note: NA – Not Available; market data as of September 30, 2016. Source: Capital IQ.

72

15

Advise.

Network.

Invest.

Momentum Partners, L L C Momentum Capital Markets, LLC 340 Brannan Street | Suite 501 San Francisco, California 94107 Michael Tedesco Executive Chairman [email protected]

Eric McAlpine Managing Partner [email protected]

Petros Kitsos Senior Advisor [email protected]

Timothy Lipton Partner [email protected]

Keith Skirbe Director [email protected]

*Securities offered through Momentum Capital Markets, LLC, a division of Financial Telesis Inc. Member FINRA/SIPC.

Dino Boukouris Director [email protected]