Former AVG Investors and Executives Pool in to Ride the Cybersecurity Wave
A $125 million fund is currently being raised by a group of former executives and investors involved with prominent commercial security software maker, AVG technologies. A founding partner is clear about the investment fund – to tap into the burgeoning cybersecurity market.
A group of executives and investors formerly associated with antivirus giant AVG are raising $125 million to invest in the expanding cyber security market, according to Forbes.
The demand for and prominence of cybersecurity has grown substantially in recent years. Cars; healthcare organizations; government databases; nuclear administrations; airlines; gaming networks; dating websites; the White House; Hotels; celebrities; Uber; routers, and browsers (phew!) are just a few of a handful of institutions, people, programs and organizations hacked in the recent past. Even WikiLeaks is currently carrying malware, unbeknownst to users of the website.
If one thing is entirely clear, there is a ready requirement for cybersecurity to be implemented in more areas of industry, besides the need for better cybersecurity.
The Monetary Gains with the Cybersecurity Industry
Research firm Gartner estimates that the cybersecurity market will grow to $77 billion in 2015, up by 8% from last year.
Richard Seewald, one of the original investors in AVG sees the potential in the growing market and contends that his company – Evolution Equity Partners is seeking to triple its investment in a five years. Their aim is to focus on European and U.S. companies that are ready to expand globally in their operations.
“We are picking segments where top line growth is exponential,” he said.
Large enterprises are not going to stop spending on security software. This spending growth is not going away.
Evolution Equity has already secured $70 million through various commitments for its new cyber security fund. The company plans to reach investments of up to $125 million by Q1 2016.
Seewald claims that individual investments range between $5 million to $15 million.
The fund aims to target up to 15 companies with a plan to sell or announce an IPO in a further 3 to 5 years.
“We are looking at companies… where revenue growth is accelerating, and early stage risk has dissipated,” Seewald added.
“Often those companies are… at a point where they have been growing rapidly over the last three to five years, raised money from top-flight U.S. venture capital funds and are looking now to go international.”
The fund’s first two investments came from SecurityScorecard, a firm recently involved in benchmarking IT security in universities and Onapsis, for a total of $17 million in a round of funding last week.
As a company, AVG went public in 2012 and weighed at a valuation of $870 million after an IPO that raised $125 million initially.
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