Cybersecurity: challenges, deals, and opportunities for private markets

Cybersecurity has featured prominently in the news – and in Preqin First Close – in 2025. Earlier this year, we explored Alphabet’s $32bn acquisition of cybersecurity company Wiz. And last month, we highlighted the first UN treaty to combat cybercrime. Here, we take a second look at developments in the sector, scanning Preqin data on some big recent deals.

Cybersecurity in the news

This is a subject that’s been hitting headlines all year. In January, Arizona-based medical services provider SimonMed Imaging reported a ransomware attack, affecting 1.2 million patients. More recently, in October, Vietnam Airlines investigated a data breach through a third-party customer service platform, which gave unauthorized access to customer data.

These are only a few examples from a long list of incidents in 2025. The Center for Strategic & International Studies has compiled a list of significant cyber incidents since 2006.

North America at the forefront

According to Preqin data, there were 184 VC-backed cybersecurity deals totaling $3.7bn globally in Q1–Q3 2025, below the 197 and $3.6bn in 2024. North America deals remain dominant, accounting for 92 and $2.1bn in the first three quarters of 2025, while APAC-based deals have declined (Fig. 1).

Fig. 1: Number and aggregate value of cybersecurity VC deals by region, Q1 2020–Q3 2025

_{Source: Preqin Pro. Data as of December 2025}

In the wider context, VC-backed deals focused on cybersecurity have fallen since peaking at 461 in 2021, decreasing to 407 in 2022 and 314 in 2023. This aligns with a decrease in VC-backed deals overall, from a high of 33,632 deals in 2021 to 14,771 in the first three quarters of this year, as highlighted in the Venture Capital Q3 2025: Preqin Quarterly Update.

On the private equity side, buyouts that include a focus on cybersecurity listed on Preqin Pro reached 64 in Q1–Q3 2025, a decline from 104 in 2024. Deal value totaled $1.5bn in the first three quarters, below $3.8bn last year and $2.6bn in 2023 (Fig. 2).

Fig. 2: Number and aggregate value of cybersecurity buyouts by region, Q1 2020–Q3 2025

_{Source: Preqin Pro. Data as of December 2025}

Deals, deals, and more deals

Mega deals such as Alphabet’s acquisition of start-up Wiz for $32bn in March have brought attention to the cybersecurity sector. It’s the largest acquisition in the history of Alphabet, which owns Google. The deal reportedly includes a $1bn retention bonus pool for Wiz staff.

Also in March, cybersecurity solutions provider ReliaQuest announced a growth funding round, led by EQT, KKR, and FTV Capital, with participation from Ten Eleven Ventures and Finback Investment Partners, raising more than $500mn.

In June, AI data security company Cyera US announced a $540mn series E funding round, led by Georgian, Greenoaks, and Lightspeed Venture Partners.

Cato Networks, operating a Secure Access Service Edge-based platform, announced a series G round in the same month, raising $359mn. Existing investors included Lightspeed Venture Partners, Acrew Capital, and Adams Street Partners.

Cloud security company Netskope completed an IPO on the Nasdaq Global Select Market in September, raising $908mn and valuing the company at more than $8bn. It was backed by several VCs. In October, San Francisco-based cyber exposure management and security company Armis raised $200mn in a series D round that included General Catalyst, Alkeon Capital, Brookfield Growth, and Georgian. In March, it acquired Otorio.

AI company Dataminr announced in October that it plans to acquire ThreatConnect in a $290mn deal. In the same month, Sublime Security raised $150mn in a series C led by Georgian.

Last month, identity security firm Saviynt raised $700mn in a series B round, led by KKR, with participation from Sixth Street Growth and Ten Eleven, and additional funding from existing series A investor Carrick Capital Partners.

Business outlook and government action

With businesses struggling to tackle the cyber threat, there are ample opportunities for innovation and for private capital. UK-based cybersecurity company Darktrace, which was taken private by US private equity group Thoma Bravo in a £4.3bn deal in 2024, plans to expand in the US. Darktrace’s CEO Jill Popelka describes it as ‘the world’s largest and fastest-growing cyber security market’.

There's also a global dimension. At the end of October, 65 nations signed the first UN treaty tackling cybersecurity, which was adopted by the General Assembly in December 2024, to increase international cooperation.

Earlier on in the year, the World Economic Forum published its Global Security Outlook 2025, noting increasing geopolitical tensions, the complexity of supply chains, and emerging technologies such as AI as some of the challenges. Based on current evidence, those challenges seem likely to remain and could drive innovation in the sector.

Kerstin Weil is Research Editor of Preqin First Close.

Second look is edited by Libby Fennessy, Production Editor of Preqin First Close.

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_{The opinions and facts included in the above do not constitute investment advice. Professional advice should be sought before making any investment or other decisions. Preqin accepts no liability for any decisions taken in relation to the above.}