A prospective blockbuster cybersecurity deal by Alphabet would be the second-largest ever, as well as its second multi-billion dollar security acquisition in the past three years. This comes as VC and PE funding for cybersecurity startups is making a sharp turnaround after a dreadful 2023. The bounce may be inspired by a renewed wave of high-profile hacks, headlined by the exposure of customer records held by 165 companies that utilized Snowflake software to host their data. With hundreds of millions of individuals impacted, the Snowflake hack is expected to be among the largest data breaches of all time. An uptick in cyberattacks and associated costs could herald a simultaneous increase in the value of firms that defend against such threats.
Related ETF: First Trust NASDAQ Cybersecurity ETF (CIBR)
Per reporting from the Wall Street Journal, Google parent Alphabet is on the verge of acquiring cybersecurity startup Wiz for roughly $23 billion. While such a deal would represent the tech giant’s most pricey acquisition ever, it would be second to Cisco’s 2023 takeover of Splunk in terms of the largest cybersecurity buys in history. Cisco doled out $28 billion to close that deal. Despite that record-breaking agreement, venture funding of cybersecurity startups slumped to a five-year low in 2023, worth just $8.2 billion across 692 deals last year. Per Crunchbase numbers, that dollar figure was barely half of the $16.3 billion raised in 941 deals throughout 2022. The slowdown intensified toward the end 2023, as Q4’s haul was the smallest of the year.
That trajectory may have been reversed in part by a renewed wave of high-profile hacks – particularly those targeting the communications sector. Earlier this year, MRP covered an AT&T breach that compromised the data of about 7.6 million current account holders and 65.4 million former account holders – including customer passcodes and social security numbers. The hacked data may have leaked not through AT&T, but from a vendor contracted by the telecom giant, which would raise questions about how easily accessible customer information can be accessed by vulnerable third parties. This type of attack has impacted AT&T customers before, and it would again just weeks later when hackers breached…
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