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Baltimore-Washington cyber firms could see $1 billion in venture funding in 2016

Tuesday, January 19, 2016   (0 Comments)
Posted by: Megan Mann
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The Baltimore-Washington, D.C., region could hit the billion-dollar mark in cybersecurity venture funding in 2016.

Jonathan Aberman, managing director of Amplifier Ventures, a seed and early-stage venture capital fund based in McLean, Va., said big fourth-quarter investments in cybersecurity companies helped boost overall venture funding in 2015 – and will continue to grow this year. He said the region, a growing center for cybersecurity business and research overall, will see more big deals in 2016.

“I wouldn’t be surprised to see $500 million to $1 billion in cyber deals over the next 12 months,” Aberman said. “I just think its going to be a big year for cyber.”

Last year, the Greater Washington and Baltimore regions saw a combined $302 million in cybersecurity-related deals, 21 percent of all deals for the year. Those helped push 2015 venture funding to $1.4 billion, higher than the nearly $1.1 billion in 2014 but less than the $1.5 billion reported in 2013.

Overall, the number of deals was down to 169, the lowest since 2011, as the average size of the deal increased. The figures are from the quarterly MoneyTree report released Friday by PricewaterhouseCoopers and the National Venture Capital Association with data from Thomson Reuters.

The biggest deal in the last quarter of 2015 was security-related — a later-stage investment in Columbia-based network security firm Tenable Network Security Inc., which secured $250 million in funding, just shy of the region’s record.

Fulton-based IronNet Cybersecurity Inc. received $25 million in venture funding, the third biggest deal in the quarter. Arlington, Va.-based threat analytics firm ThreatConnect Inc. secured $16.1 million in funding.

“Deals like the Tenable deal and ThreatConnect are demonstrative that I think we are going to see more cybersecurity deals coming into our market over the next year,” Aberman said.

He said venture capitalists are looking for new growth areas to invest in, and the growing fields of robotics, the Internet of things and virtual reality all have the same growth area in common – the need for advanced security.

Alexander Pessala, a principal at private investment firm Middleland Capital, agreed that cyber companies will capture a larger share of venture funding in 2016 than it did in 2015.

This article was originally published in the Baltimore Business Journal.


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