Blog of Intellectual Capital

by Eric Bell, Managing Director at Progress Partner and Member of Gerbsman Partners Board of Intellectual Capital

• IPOs, Unicorns and $1B+ Exits: Overall, global IPO deal volume is down (46%) and IPO proceeds are down (58%) YTD. So far in 2022, 19 new cybersecurity unicorns have been minted and there have been 8 $1B+ exits in the space, keeping pace with 2021 
• Public Market Performance: The Progress Cybersecurity Index was down (21.6%) in Q2 and (22.7%) YTD vs. NASDAQ’s (22.7%) decline in Q2 and (30.3%) YTD. TTM revenue multiples for cybersecurity stocks declined similarly quarter-over-quarter at 7.0x, down from 10.9x at the end of Q1—the lowest level we’ve seen in 2 years. 
• Financing Trends: During the quarter, VC and PE firms invested $5.4B in 180 cybersecurity companies, down from 249 deals in Q1 but flat from a transaction value perspective.  Application security, data security and threat and vulnerability management (TVM) were the most active product categories receiving funding. 
• M&A Activity: Q2 2022 was another strong quarter for M&A activity for cybersecurity with 118 deals worth $19.7B, excluding Broadcom’s whopping $69.2B acquisition of VMWare.  Revenue multiples for deals declined slightly less than public markets, declining to 8.7x in Q2 from 11.6x TTM revenue in Q1 
• Segment Spotlight | Post-Quantum Cryptography: Recent legislation is driving newfound investment and activity in the race to protect critical infrastructure and systems against potential threats from quantum computers. We highlight the key trends, players and legislation driving the segment. 
• Please click on link to access detail report http://progresspartners.com/cybersecurity-market-report-q2-2022/