We hope you had a relaxing summer; it appears most venture investors did. While every investor we know said, they were “open for business,” what we saw in the market told a different story. Most investors were “pencils down” this summer. For the first time in a couple of years, we’re likely to see that deal volume dropped quite a bit in August. That said, we’re not so sure the trend will continue into year-end. Like every September in the years before COVID, we’re likely to see a resumption of deal activity. We’ll be sure to report back on our prognostication in next month’s memo.
Turning to the current investing environment, the famous Wall Street quote is “buy when there is blood in the streets.” While we haven’t seen blood yet, the Fed has signaled that they plan to remain hawkish on inflation, and more pain will likely come. This has prompted the team at Lytical to write a whitepaper considering why now is a great time to invest in early-stage cybersecurity. See the below recommended reading, “Optimism remains despite reducing cyber financing,” referencing our paper. Another article we recommend looks at how AI is being used to predict protein structures, the result of which is having an enormous impact on science and medicine.
Finally, it’s good to be the CISO. Supply and demand have made cybersecurity salaries spike, and the top job of CISO is no different. CISOs have become a more permanent fixture at the board level and are no longer scapegoats when something goes wrong. Since many of our investors are CISOs, we think this is great news!
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.
Here's a curated list of things we found interesting.
Optimism remains despite reduced cyber financing
Our report, first shared by Momentum Cyber, on Why Now Is a Great Time to Invest in Early Stage Cybersecurity got referenced in thispiece about market optimism for cybersecurity. Get your own copy here.
SecurityWeek reports that cybersecurity market optimism remains high among investors despite a decline in cyber financing during the second quarter of this year.
Google's DeepMind AI Predicts 3D Structure of Nearly Every Protein Known to Science
Protien folding has been a project that I’ve watched for years, during the early days of COVID there was a project to map the virus that allowed you to use a screensaver to donate computing power. That may all be obsolete thanks to AI.
On Thursday, Google's sister company, DeepMind, announced it has successfully used artificial intelligence to predict the 3D structures of nearly every catalogued protein known to science. That's over 200 million proteins found in plants, bacteria, animals, humans — almost anything you can imagine.
CISO salaries balloon, likely spurred by demand
As CISOs become more important and valuable we believe it will also be followed by increased budgets so it’s likely a leading indicator of cyber spend.
Tenure matters, but not as you might suspect. Median total cash compensation dropped for CISOs in their roles at least five years, Heidrick & Struggles found.
Deals that caught our eye.
Ping Identity to be Acquired by Thoma Bravo for $2.8 Billion
Ping Identity (NYSE: PING), provider of the Intelligent Identity solution for the enterprise, today announced that it has entered into a definitive agreement to be acquired by Thoma Bravo, a leading software investment firm, for $28.50 per share in an all-cash transaction valued at an Enterprise Value of approximately $2.8 billion. The offer represents a premium of approximately 63% over Ping Identity's closing share price on August 2, 2022.
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.