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CYBER THOUGHTS NEWSLETTER
MAY 2022
As we mentioned last month, the cooling-off of Series A deals has officially started. Many of the VC twitter crowd have begun posting threads on how to manage in a downturn, and YC and A16Z both put out memos telling their founders to expect a difficult fundraising environment. While this is all good advice, it does feel like a few of the folks urging fiscal restraint on Twitter were the same crowd extolling Blitz Scaling back in January. It's a bit like spiking the punch bowl and then complaining about all the drunk people at the party.
The annual RSA cybersecurity convention will be in SF next week, and it remains to be seen if the turnout will be a large one. It has been canceled since 2019, when it was the last conference before Covid, but by the number of cocktail party invites we've received, we think it will likely be very well attended. If you're going to be in town and would like to meet with us please reach out.
Last month we discussed how cloud-native cybersecurity companies gained superpowers. This month we kick off with an article about how cybersecurity companies utilize a product-led growth strategy. This is a natural sales motion for cloud-native applications since they deploy in minutes rather than weeks. We have been a fan of this sales motion for a while now, and several of our companies make use of it.
Below are a few of the articles that caught our attention this month. Moreover, we’ve inserted one or two sentences in italics, summarizing each article’s importance. We hope you enjoy and appreciate the material.
WHAT WE'RE READING
Here's a curated list of things we found interesting.
H1 2022 cybersecurity product-led growth market map
Cybersecurity has traditionally been the domain of Enterprise Sales but most CISOs don't enjoy being sold to, and AWS has taught a whole generation how to buy differently.
Product-led growth is one of the most commonly discussed topics in the startup world as the market cap of public companies utilizing the growth tactic skyrocketed in recent years. It's no different in the cybersecurity space. Why?
A Framework for Navigating Down Markets
This is being compared to the deck Sequoia sent out during the last downturn "RIP Good Times" that marked a major sentiment change among venture investors. The market has taken a downturn, and every other blog or tweetstorm seems to offer the same general advice: conserve cash, extend runway, shift from focusing on growth to focusing on efficiency.
2DOD Using AI to Drive Business Processes, Official Says
The DOD has over 680 AI projects and while we often focus on the high-tech cybersecurity use cases a lot of them are less sexy but still important. The reality of the Department of Defense's artificial intelligence projects is "much more mundane" than what some might be imagining, a top technology official at the Pentagon said. Lt. Gen. Michael Groen, director of the DOD's Joint Artificial Intelligence Center, said that AI is being used to drive business and production environments, C4ISRNET reported Friday.
TRANSACTIONS
Deals that caught our eye.
Mimecast goes private after Permira completes $5.8B acquisition
Email and data security company Mimecast Ltd. is now private after closing its deal with private equity firm Permira. Mimecast said on Thursday its cash acquisition by funds advised by London-based Permira went through for about $5.8 billion, or $80.00 per share. British firm Mimecast's North American operations have been based in the Greater Boston area since 2018.
ABOUT LYTICAL
Lytical Ventures is a New York City-based venture firm investing in Corporate Intelligence, comprising cybersecurity, data analytics, and artificial intelligence. Lytical’s professionals have decades of experience in direct investing generally and in Corporate Intelligence specifically.