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Security Hot Again in the Venture World

Security Hot Again in the Venture World
by Bernard Murphy on 08-04-2021 at 6:00 am

From a lowly perspective in the hardware world, VCs can seem like magpies. Overly fascinated with bright, shiny ideas of questionable value. Stratospheric  valuations and a quick exit that have the rest of us scratching our heads. What difference is this going to make beyond minting a few new billionaires? Why not, say, have security be hot? We could all get behind that.

Security Hot Again

Sometime VCs do get excited about ideas we can understand, and serious technologies get serious funding. This is now happening in security ventures per an article in the New York Times. $12.2B so far this year has been pushed into security startups, with average valuations now of over $500M. Ransomware attacks are driving this heightened visibility according to Gartner among others.

Opportunities for hardware ventures?

These new ventures are all software based as far as I can tell. They emphasize  new methods to counter attacks in the cloud and to provide stronger identity verification. May be opportunities here for hardware ventures to contribute?

According to a SemiEngineering roundup, Kneron as part of a funding round acquired Vatics for surveillance and security camera operation. Armis raised $125M for IoT security. A software-based platform but tied into hardware endpoints. Again from SemiEngineering, Axiado raised $20M. Thinner pickings but I wouldn’t doubt there will be trickle down from the heavy-hitters in the cloud to edge applications needing to provide security support.

Where is early-stage semi funding going?

Always tricky to find definitive references but here’s one source. A lot of $$ going into mid-stage rounds for autonomy, nearly $200M for an AI hardware venture in China, then it drops off quite rapidly. Multiple ventures in EVs, sensors and batteries and a sprinkling in AI and memories. Even a used fab equipment reseller, though that apparently was a strategic investment. Judging by the success Silicon Catalyst is enjoying, I have no doubt there’s plenty of money to be had.

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