Data privacy has been a big talking point over the last few years. While many businesses are doing everything they can to upgrade their network security, and consumers are finding easier avenues to delete personal information from Google, a seismic part of the fight is being done by cybersecurity companies.
According to a cybersecurity report conducted by Pinpoint, however, 2023 saw a 40% drop in funding for cybersecurity companies. While the number of funding rounds actually increased from 303 to 437, the total finances raised amounted to $8.7 billion – a harsh drop compared to the $14.5 billion accumulated in 2022.
When looking at these stats in a wider context, it seems the interest rate hikes, inflation, and the collapse of several tech banks in 2022 and 2023 have played a part in slowing down cybersecurity investment.
According to Umesh Padval, who is a venture partner at Thomvest Ventures, most venture capital funds are now ‘focused on their current portfolio of companies, which are affected by the slowdown in spending’. This has created a tough funding environment not only for startups, but for existing, funded companies that are experiencing less investment in new deals.
For consumers and businesses alike, this is a concerning report that further highlights the difficult cyber landscape that we live in. Cyber attackers are constantly getting stronger, with new tools and methods that can infiltrate multi-cloud systems to retrieve both business and user data.
Without the appropriate investments, however, it becomes harder for cybersecurity companies to keep up with them. With innovation being key in the cybersecurity space – just as it is key for hackers – a lack of funding puts the cybersecurity industry one step behind during a time where they need to be two steps ahead.
This, in turn, creates more risk for businesses and their consumers. With multi-cloud systems getting denser, it’s becoming harder to maintain advanced observability and monitoring, which subsequently leaves areas of a businesses network up for grabs by nefarious hackers.
Adding onto this, while businesses might have adequate cybersecurity tools right now, that doesn’t mean they’re going to have the same adequacy in 2024 or 2025. As mentioned before, hackers are constantly finding new tricks to infiltrate networks, and cybersecurity practices need to constantly evolve to keep up with these tricks.
For consumers, the danger is obvious. Whenever a business collects user data, it is stored on their systems and becomes a prime target during cyber attacks. This is why so many users are now opting to remove their information from Google, or delete their digital footprint entirely – vastly reducing the chances of their data being taken and put at risk on vulnerable, external networks.
For consumers who haven’t done this, the risk to their data has now invariably gone up a few notches. Once again, while many businesses might have strong cyber defences now, if cybersecurity companies cannot innovate in the way they need to, then those defences won’t last forever.
That’s not to say funding will never return, of course. It also has to be said that the demand for updated and efficient cybersecurity remains strong, despite the fact that investment has been made more difficult in recent years. For consumers, then, it is still about interacting with companies whom they trust and have done well to remain transparent with their cybersecurity practices. Coupled with the ability to control their own data, this #puts them in the best stead to keep their data as safe and secure as possible in a landscape that has just been made that little bit more dangerous.
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