Welcome to the Q3 2020 edition of the CyberScope – Results International’s market update for the global cybersecurity sector.
The Covid-19 pandemic has driven significant demand for cybersecurity products and services as businesses have grappled with a newly dispersed workforce, massive increases in ecommerce, and other digital communications replacing face-to-face engagement. As we progress through the pandemic, we expect these and other newly adopted behaviours to drive long-term strength in the sector.
Results International has remained active in the space during Q3, advising QinetiQ on the disposal of Boldon James to HelpSystems; a transaction completed within seven weeks during lockdown.
Highlights of the quarter:
Valuations in public markets remain strong
- Our basket of public companies are trading at their highest revenue multiple since the end of 2015 (6.4x at the median).
- This is partially driven by the cohort of 2019 IPOs (Cloudflare, Ping Identity and Crowdstrike) all of which are trading at more than double their initial listing price
- Private company valuations are also high, for example, Snyk, which raised $200m in the quarter, is now valued at $2.6B+.
IPO activity around the space has recommenced
- Sumo Logic listed at the end of the quarter with a share price increase of 20% on day one.
- McAfee and Palantir each filed for a Q4 listing.
Despite a low number of transactions in Q3, overall private market appetite remains very healthy
- 18 announced transactions in Q3 compared to 31 in Q2 and 34 in Q3 2019.
However, several high profile transactions have been announced in the early part of October – Cisco/PortShift, Imperva/jSonar and ZeroFOX/Cyveillance.
Funding continues to flow into the sector in both the US and Europe, where, for example, Ravelin raised a further $21m from Draper Esprit, BlackFin Tech, Amadeus Capital Partners and Passion Capital.
Results International has remained active in the space during Q3, advising QinetiQ on the disposal of Boldon James to HelpSystems; a transaction completed within seven weeks during lockdown. Please do get in touch to discuss.