As vendors look to solidify their positions & expand their offerings, the global cybersecurity mergers & acquisition continues into 2022. Accelerated use of technology & digital system has completely changed the traditional way of working & has brought a new & faster way for working. All these new changes to the infrastructure have led to greater risk to the systems, processes & its sensitive data & documents. In today’s time it’s very clear that digital infrastructure & connectivity supports & stimulates in the way people work. Easy & quick access to reliable digital connectivity i.e. mobile phones & wireless devices, internet, broadbands, applications, services etc are very necessary for all the businesses & it will be very essential to keep up the pace with global developments. Therefore, organizations have to protect their digital assets such as organizations data, documents, algorithms and other sensitive data very effectively.
Today technology has advanced and so is the use of technology. As the use of technology advance, approach of cybercriminals become much more advanced & cosmopolitan. Multiple factors are converging in 2022 to dramatically reshape cyber security. The industry was already in a period of accelerated activity before COVID-19 shook the world. The median deal size grew from USD 30 million in 2018 to USD 50 million in 2021, an increase of more than 66 percent after a two-year plateau from 2016 to 2018.
Now global uncertainty, driven primarily by Russia’s invasion of Ukraine and NATO’s defensive circling of the wagons, has increased the need for newly fortified security systems. Cyber warfare strategies are at play everywhere and at the same time, more digital vulnerabilities have been exposed than ever before. The COVID-19 pandemic resulted in the rushed implementation of largely un-vetted digital technologies that pushed more sensitive (and valuable) business activity online — creating ripe targets for bad actors.
These pressures have been a catalyst for rapid growth and activity in the sector. Total deal value in Q1 2022 amounted to USD 15.3 billion, a 34.6 percent increase over the same period in 2021. Strikingly, it also represented a 155.2 percent quarter-over-quarter jump from Q4 2021.
But rising interest rates and inflation threats are cooling VC capital as a whole, or at least, initiating changes in strategy. As the IPO market has slowed to a crawl in 2022, investors are acting more cautiously, firmly entrenched and thinking longer term. While public listings drove the majority of exit value over the past three years, buyouts may now factor more prominently instead. Venture-backed cyber security acquisitions grew by nearly 60 percent between 2020 and 2021 and may continue to dictate exit values in the coming years.
Shifts in approach will depend largely on geography. America has historically seen the most deal activity in cybersecurity, and that leadership is likely to continue. However, Europe holds the number-two global ranking in cybersecurity M&As, and activity there is poised to explode. The prospects for Asia, in contrast, are much more difficult to predict. Historically, M&A activity in Asia has been highly variable, with 2022 showing minimal activity so far. While activity so far in 2022 has been sparse, it should be monitored closely given recent geopolitical concerns.
The pandemic-fueled digitization of business dealings, coupled with increased geopolitical strife and conflict, has made the need for cybersecurity technology even greater in 2022, thus potentially ramping up M&A activity in the sector. However, additional factors like inflation, a potential recession and continental alliances may accelerate or throttle dealmaking in unpredictable ways.
The DocullyVDR team is a provider of a new generation secure data sharing platform designed for businesses. The team has extensive experience in working with document sharing platforms and has been assisting the Virtual Data Room community since 2019 by providing users with free information.