Security News > 2021 > March > What's Behind the Surge in Cybersecurity Unicorns?

Several industry professionals have shared thoughts on why we are seeing a surge in cybersecurity unicorns.

Private market data provider PitchBook told SecurityWeek that a record was set in the first quarter of 2021, with 12 cybersecurity unicorns created globally, which is more than double the previous quarterly high.

"In 2020, forward revenue multiples for high-growth public cybersecurity companies more than doubled to around 40x, effectively halving the revenue target that startups must reach to achieve unicorn status. Growth equity investors are using public market comparisons to judge how much private companies are worth, even at a relatively early stage. While several years ago a startup might need to reach $100 million in annual recurring revenue to become a unicorn, only a fraction of that sum is required now. Startups can achieve unicorn status soon after finding product-market fit with the expectation of growth to much higher valuations in public markets."

"After spending the last year scanning the universe for cybersecurity unicorns, I have strong opinions about this. Check to see if a unicorn's horn is real, or if it is glued onto a horse. A real cybersecurity unicorn's horn needs to consist of real scaled revenue somewhere north of fifty million annually depending on the type of technology. This revenue needs to be happening right now, combined with a realistic multiple that quality investors in the market are willing to pay."

"When you look at the strong fundamentals of cybersecurity in the context of the broader financial market trends, it's not surprising that cyber unicorns have become less elite and have lost some of their mystique to the fabled decacorn."

Updated - 13 cybersecurity unicorns were announced since November 2020, not December 2020.

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