=Paper=
{{Paper
|id=Vol-3188/short6
|storemode=property
|title=Cybersecurity Startup Investments (short paper)
|pdfUrl=https://ceur-ws.org/Vol-3188/short6.pdf
|volume=Vol-3188
|authors=Tetiana Moiseienko,Anastasiia Kiva
|dblpUrl=https://dblp.org/rec/conf/cpits/MoiseienkoK21
}}
==Cybersecurity Startup Investments (short paper)==
https://ceur-ws.org/Vol-3188/short6.pdf
Cybersecurity Startup Investments
Tetiana Moiseienko1 and Anastasiia Kiva1
1
National Technical University of Ukraine “Igor Sikorsky Kyiv Polytechnic Institute,” 37 Peremohy ave., Kyiv,
03056, Ukraine
Abstract
The rapid growth of computer systems in different industries, such as financial systems,
industrial equipment, aviation, consumer devices, government and others, means that there is
an increasing number of systems at risk. Cybersecurity is important because it protects all
categories of data from theft and damage. This includes sensitive data, personally identifiable
information, protected health information, personal information, intellectual property, data,
and governmental and industry information systems. This paper examines roles of startups in
cybersecurity systems in different industries. Cybersecurity products, services and
professionals have never been in higher demand. A contributing factor to the cybersecurity
skills gap is the large number of security startups that have been founded in recent years.
Keywords1
Computer systems, cybersecurity, cybersecurity market, startup.
1. Introduction
The pandemic has had a major impact on cybersecurity. Cybercrimes now cost the world nearly
$600 billion each year, according to Mordor Intelligence - equivalent to nearly 0.8% of the global GDP.
Meanwhile, the World Economic Forum reports that the likelihood of identifying and prosecuting the
perpetrators of cyberattacks in the U.S. has fallen to a dismal 0.05% [1].
According to a research report “Cybersecurity Market with Covid-19 Impact Analysis by
Component (Software, Hardware, and Services), Software (IAM, Encryption, APT, Firewall), Security
Type, Deployment Mode, Organization Size, Vertical, and Region—Global Forecast to 2026”
published by MarketsandMarkets, In the post-COVID-19 scenario, the global cybersecurity market size
is projected to grow from USD 217.9 Billion in 2021 to USD 345.4 Billion by 2026, recording a
Compound Annual Growth Rate (CAGR) of 9.7% from 2021 to 2026. The market’s growth can be
attributed to the increasing awareness and rising investments in cybersecurity infrastructure across
global organizations operating across verticals [2].
Amidst the COVID-19 pandemic crisis, various governments and regulatory authorities mandate
both public and private organizations to embrace new practices for working remotely and maintaining
social distancing. Since then, the digital ways of doing business became the new Business Continuity
Plan (BCP) for various organizations. With the widespread use of BYOD devices, and internet
penetration across the corners of the globe, individuals are progressively inclined towards the use of
digital technologies such as cloud solutions, driving the need for cybersecurity measures for protection
against cyber-attacks. There is growth in the need for endpoint and Virtual Private Network (VPN)
security measures and rising demand for cyber hygiene practices to ensure robust security policies and
practices amid Covid-19 pandemic [3].
CPITS-II-2021: Cybersecurity Providing in Information and Telecommunication Systems, October 26, 2021, Kyiv, Ukraine
EMAIL: t.e.moiseenko@gmail.com (T. Moiseienko); kiva.anastassia@gmail.com (A. Kiva)
ORCID: 0000-0002-2074-8062 (T. Moiseienko); 0000-0002-6610-5898 (A. Kiva)
©️ 2022 Copyright for this paper by its authors.
Use permitted under Creative Commons License Attribution 4.0 International (CC BY 4.0).
CEUR Workshop Proceedings (CEUR-WS.org)
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2. Cybersecurity Definition and Impact
Cybersecurity is part of the information security of any organization. Since the outbreak of the
COVID-19 pandemic, organizations around the world have sent their employees to their home office
for work. This decentralization of the organization's IT landscape has created new vulnerabilities for
malicious actors to use, which is consistent with the observations of IT professionals that the number
of cyberattacks is increasing after the COVID-19 pandemic. As a result, cybersecurity remains a priority
among business leaders to ensure the company’s performance and data security.
There are several definitions of “cybersecurity,” but they are quite similar.
According to Glossary of Key Information Security Terms by National Institute of Standards and
Technology (NIST) cybersecurity or computer security it is measures and controls that ensure
confidentiality, integrity, and availability of information system assets including hardware, software,
firmware, and information being processed, stored, and communicated [3].
According to Cybersecurity and Infrastructure Security Agency cybersecurity is the art of protecting
networks, devices, and data from unauthorized access or criminal use and the practice of ensuring
confidentiality, integrity, and availability of information [4].
The Law of Ukraine “On Basic Principles of Ensuring Cyber Security of Ukraine” defines the
following [5]:
1. Cybersecurity is the protection of vital interests of man and citizen, society and the state during
the use of cyberspace, which ensures the sustainable development of the information society
and digital communication environment, timely detection, prevention and neutralization of real
and potential threats to Ukraine's national security in cyberspace.
2. Cybersecurity is important because it protects all categories of data from theft and damage. This
includes sensitive data, personally identifiable information, protected health information,
personal information, intellectual property, data, and governmental and industry information
systems.
We can resume that cybersecurity is related to criminal attacks such as unauthorized access from the
inside or outside of an organization. It is the framework of protecting and securing anything that is
vulnerable to hacks, attacks, or unauthorized access which mainly consists of computers, devices,
networks, servers, and programs.
Cybersecurity is important because government, military, corporate, financial, and medical
organizations collect, process, and store unprecedented amounts of data on computers and other devices.
Much of this data may be confidential information, whether intellectual property, financial data,
personal information or other types of data, for which unauthorized access or disclosure may have
negative consequences. Organizations transmit sensitive data over networks and other devices in the
course of doing business. Companies and organizations, especially those tasked with protecting
information related to national security, health care or financial records, need to take steps to protect
their confidential business and personnel information.
The growth in the number of computer systems and the increasing reliance upon them by individuals,
businesses, industries, and governments means that there is an increasing number of systems at risk
(Table 1).
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Table 1
Type of industries under the cybersecurity risk
Industry at risk Type of risk
Financial systems The computer systems of financial regulators and financial
institutions like the National Bank of Ukraine, National
Commission on Securities and Stock Market, Ministry of Finance
of Ukraine and Physical Deposit Guarantee Fund, investment
banks, and commercial banks are prominent hacking targets for
cybercriminals interested in manipulating markets and making
illegal possessions. Websites and apps that accept or store
credit card numbers, brokerage or intermediary accounts, and
bank account information are also remarkable hacking targets,
because of the potential for immediate financial gain from
transferring money, shopping, or selling the information on the
black market.
Utilities and industrial Computer management functions in many utilities, including
equipment coordination of telecommunications, power grids, nuclear
power plants, opening and closing valves in water and gas
networks.
Aviation The aviation industry is highly dependent on a number of
complex systems that can be attacked [6]. A simple power
outage at one airport can have consequences around the world,
much of the system relies on radio transmissions that can be
disrupted, and aircraft control of the oceans is particularly
dangerous because radar surveillance extends only 175-225
miles from shore. There is also the potential for an attack by an
aircraft.
Consumer devices Desktops and laptops are usually used to collect passwords or
financial account information or to create a botnet to attack
another target. Smartphones, tablets, smartwatches, and other
mobile devices, such as quantified stand-alone devices such as
activity trackers, have sensors such as cameras, microphones,
GPS receivers, compasses, and accelerometers that can be
used, and they can collect personal information, including
sensitive health information. Wi-Fi, Bluetooth, and cell phone
networks on any of these devices can be used as attack vectors,
and sensors can be remotely activated after a successful
violation [7].
Large corporations Large corporations are a common goal. In many cases, attacks
are aimed at obtaining financial gain by stealing personal data
and involve data breaches. This could be even medical records
theft or health insurance fraud.
Automobiles Cars are becoming increasingly computerized: many models
feature engine synchronization, cruise control, anti-lock brakes,
seat belt pretensioners, door locks, airbags and advanced driver
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assistance systems. In addition, connected cars can use Wi-Fi
and Bluetooth to communicate with on-board consumer
devices and the mobile phone network. Self-driving cars are
expected to be even more complex. All of these systems carry
some security risk, and such issues have attracted attention [8].
Government Government and military computer systems are commonly
attacked by foreign powers. Local and regional government
infrastructure, such as traffic light management, police and
intelligence communications, personnel records, student
records, and financial systems, are also potential targets, as
they are all now largely computerized.
Energy sector In distributed generation systems, the risk of a cyber-attack is
real. An attack could cause a loss of power in a large area for a
long period of time, and such an attack could have just as
severe consequences as a natural disaster.
3. Cybersecurity startup investments
In the modern information age when more and more things are getting connected, cybersecurity
becomes an ever-relevant topic.
The statistic shows the size of the industrial cybersecurity hardware, software, and services market
worldwide, in 2017 and 2022 forecast (Fig. 1). Analyzing the cybersecurity services industry market
size chart, we can summarize that it has increased steadily since 2017, reaching a value of approximately
$188 billion in 2020. Despite the economic effects of the coronavirus (COVID-19), the industry is
expected to increase by 11 percent in 2021.
Figure 1: Size of the cybersecurity market worldwide, from 2017 to 2022 (in billion U.S.
dollars) [9]
The pandemic has had a major impact on cybersecurity. Cybercrimes now cost the world nearly
$600 billion each year, that’s perhaps why venture capital (VC) funding in cybersecurity more than
doubled year-over-year during the first half of 2021, while the total number of mergers and acquisitions
(M&A) in the sector more than quadrupled. A new report from AllegisCyber Capital, Momentum
Cyber, and NightDragon finds that investors poured $11.5 billion in total VC financing in H1 2021, up
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from $4.7 billion in H1 2020, and that M&As jumped from $9.8 billion across 93 transactions to $39.5
billion across 163 transactions during the same period [1].
PwC and CB Insights’ Q3 2020 MoneyTree report highlights the latest trends in venture capital
funding globally. ICT in different forms (SW, HW, telecommunication) fully dominates the US VC
industry. Monitoring and security deals grew more than double in Q3’20 (Fig. 2). According to a joint
study by CBInsights and PwC, Cybersecurity startups received over $10.7 billion in funding in 2020
(Fig. 3).
Figure 2: Top 10 US verticals by deal activity [10]
Figure 3: Top 10 US verticals by investments [10]
Overall cybercrime costs are expected to reach $10.5 trillion annually by 2025, up from $3 trillion
in 2015, according to Cybersecurity Ventures. As a result, security is expected to more than double in
size to $300 billion by 2025 [11].
As attack methodologies evolve due to AI, machine learning and nation-state hackers, security
startups are receiving a lot of funding to develop products that can secure application access for remote
workers, provide real-time visibility into cyber attacks and protect data as it travels from the cloud to
IoT devices. In this article, we’ll cover the top cybersecurity startups to watch in 2021 [11].
New startups and well-known suppliers are attracting record levels of investment as all organizations
seek to thwart the growth of complex, costly and unpredictable cyberattacks. The Cybersecurity
Ventures report estimates that the total cost of cybercrime will be $10.5 trillion by 2025. While attack
methodologies continue to evolve with new technologies such as artificial intelligence, machine
learning, cloud computing, etc., cybersecurity novices are also embracing them to find the exit door.
Here are the areas of cybersecurity that are currently the most promising in our opinion:
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● Data protection. A data breach can cost a business million and even lead to bankruptcy.
According to IBM, the average damage from data breaches is estimated at $3.62 million. And
given the fact that the ingenuity of crackers and, accordingly, the frequency of hacking
increases, products that solve problems in this area will be in great demand.
● Global business digitalization and privacy assurance. Whether a company uses a private server
or a cloud platform to run its business, most businesses require security protocols to keep
communications, data transfers, and so on, confidential. The deeper the business goes to the
Internet, the more the need for cybersecurity solutions will grow.
● Working with Big Data. It is relevant both for business and for the public sector, urban
infrastructure. Attacks on such systems are fraught not only with financial losses, government
threats, but also with the actual paralysis of all life.
● Phishing and propaganda. The emergence and continuous development of the virtual space
gives people many new opportunities—for communication, work, education and recreation. At
the same time, cybercriminals have also found their niche and are successfully using it: cyber
espionage, cyberattacks, propaganda of extremist ideas and movements are only part of the
crimes committed using technologies, the number and variety of which is increasing every year.
The creation of new methods of counteraction and combating all this is more urgent than ever,
and needs an innovative approach.
The advantage of startups over industry giants is flexibility, responsiveness, and relatively modest
product development budgets. Thanks to this, they have every chance to become a locomotive for the
development of innovations and very highly specialized solutions, which everyone - both people and
business, and even entire states—is in dire need of now.
4. Conclusion
The Covid-19 pandemic and consequent lockdowns have obliged companies to face new challenges
such as smart working, remote work and digitalization, accelerating all previous efforts in that direction.
As reported by Gartner, most organizations were already moving their digital agenda forward at a steady
pace, but the Covid-19 pandemic required a significant leap in the development of digital products and
services, with the goal of maintaining and fostering customer engagement. However, digitalization has
generated many cybersecurity issues and the intensification of cyberattacks all around the world [12].
Amidst the COVID-19 pandemic crisis, various governments and regulatory authorities mandate
both public and private organizations to embrace new practices for working remotely and maintaining
social distancing. There is growth in the need for endpoint and Virtual Private Network (VPN) security
measures and rising demand for cyber hygiene practices to ensure robust security policies and practices
amid Covid-19 pandemic [3].
Cybersecurity is the protection of vital interests of man and citizen, society and the state during the
use of cyberspace, which ensures the sustainable development of the information society and digital
communication environment, timely detection, prevention and neutralization of real and potential
threats to Ukraine’s national security in cyberspace.
Cybersecurity is important because it protects all categories of data from theft and damage. This
includes sensitive data, personally identifiable information, protected health information, personal
information, intellectual property, data, and governmental and industry information systems.
According to a research report “Cybersecurity Market with Covid-19 Impact Analysis by
Component (Software, Hardware, and Services), Software (IAM, Encryption, APT, Firewall), Security
Type, Deployment Mode, Organization Size, Vertical, and Region—Global Forecast to 2026”
published by MarketsandMarkets, In the post-COVID-19 scenario, the global cybersecurity market size
is projected to grow from USD 217.9 Billion in 2021 to $345.4 billion by 2026, recording a Compound
Annual Growth Rate (CAGR) of 9.7% from 2021 to 2026. The market’s growth can be attributed to the
increasing awareness and rising investments in cybersecurity infrastructure across global organizations
operating across verticals.
Overall cybercrime costs are expected to reach $10.5 trillion annually by 2025, up from $3 trillion
in 2015, according to Cybersecurity Ventures. As a result, security is expected to more than double in
size to $300 billion by 2025 [12].
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As attack methodologies evolve due to AI, machine learning and nation-state hackers, security
startups are receiving a lot of funding to develop products that can secure application access for remote
workers, provide real-time visibility into cyber attacks and protect data as it travels from the cloud to
IoT devices. In this article, we’ll cover the top cybersecurity startups to watch in 2021 [11].
5. References
[1] K. Wiggers. Cybersecurity startup investments more than doubled in H1 2021, 2021. URL:
https://venturebeat.com/2021/08/25/cybersecurity-startup-investments-more-than-doubled-in-h1-
202
[2] Cybersecurity Market Overview. Markets and markets, 2021. URL:
https://www.marketsandmarkets.com/PressReleases/cyber-security.asp
[3] R. Kissel, Editor. NIST. Computer Security Division Information Technology Laboratory.
Glossary of Key Information Security Terms, 2019. doi: https://doi.org/10.6028/NIST.IR.7298r3
[4] CISA. What is Cybersecurity? Cybersecurity and Infrastructure Security Agency, 2019. URL:
https://us-cert.cisa.gov/ncas/tips/ST04-001
[5] Law of Ukraine "On the Basic Principles of Cyber Security of Ukraine" of October 5, 2017 №
2163-VIII, 2021. URL: https://zakon.rada.gov.ua/laws/show/2163-19#Text.
[6] P. G. Neumann, Computer Security in Aviation: Vulnerabilities, Threats, and Risks, 1997. URL:
http://www.csl.sri.com/neumann.html
[7] A. Shahani, Is Your Watch Or Thermostat A Spy? Cybersecurity Firms Are On It, 2014. URL:
https://www.npr.org/sections/alltechconsidered/2014/08/06/338334508/is-your-watch-or-
thermostat-a-spy-cyber-security-firms-are-on-it
[8] Edward J. Markey, Tracking & Hacking: Security & Privacy Gaps Put American Drivers at Risk,
Report, 2015. URL: https://www.markey.senate.gov/imo/media/doc/2015-02-06_MarkeyReport-
Tracking_Hacking_CarSecurity%202.pdf
[9] Size of the cybersecurity market worldwide, Statista, 2021. URL:
https://www.statista.com/search/?q=Size+of+the+cybersecurity+market+worldwide&Search=&q
Kat=search
[10] MoneyTree Report 2020 Q3, PricewaterhouseCoopers and CB Insights, 2020. URL:
https://www.pwc.com/us/en/moneytree-report/assets/MoneyTree_Report_2020_Q3.pdf
[11] K. Guercio, Top 22 Cybersecurity Startups to Watch in 202, eSecurity Planet, 2021. URL:
https://www.esecurityplanet.com/networks/hot-cybersecurity-startups/
[12] M. Bozzetti, L. Olivieri, F. Spoto, Cybersecurity Impacts of the Covid-19 Pandemic in Italy.
ITASEC’21: Italian Conference on CyberSecurity, Italy, 2021, pp. 145-155. URL: http://ceur-
ws.org/Vol-2940/paper13.pdf
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