Security startups become a sought-after acquisition

For the past 12 months, the once-gloomy IPO deal for cyber-security start-ups has outpaced the well-known companies such as Facebook and Zynga, a social gaming company. The article points out that the safety start-up company has also become a sought-after acquisition target. Apple, for example, has been avoiding large-scale mergers and acquisitions, but last month it agreed to buy AuthenTec at a price of $356 million, the second-largest acquisition by the company so far.

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Now the problem is no longer who has been attacked by hackers, but who has not been attacked.

Mischievous people, criminal syndicates or foreign governments have attacked many organizations, including Google (Weibo), social networking site LinkedIn, and the US Central Intelligence Agency (CIA).

Large companies are expected to invest 32.8 billion of billions of dollars in computer security this year, up 9% from last year, according to data from market research firm IDC. IDC predicts that small and medium-sized Enterprises will invest more in security than in other information technology areas.

But in Silicon Valley, where frenzied discussions revolve around innovation and start-ups, few entrepreneurs and venture capitalists are keen to accept Symantec and Mcaee in many cases as cyber criminals. But that has begun to change. For the past 12 months, the once-gloomy IPO of the cyber-security start-up company has outpaced the well-known companies such as Facebook and Zynga, a social gaming company.

Imerva, a data security firm that listed last year's IPO, had the best IPO performance in 2011, rising nearly 30% per cent on its IPO debut, which is still 37% higher than its IPO price today. In contrast, Zynga's share price has fallen 73% per cent since last December.

The shares of Splunk, a data security firm, have risen nearly 65% since the IPO in April, raising 331 million of billions of dollars from a second-sale deal. In a recent security company IPO, the company's shares rose 26% per cent as security start-up company Palo Alto NX the IPO in July.

What are the reasons for the market to be enthusiastic about safe startups? "People are beginning to realize that tens of billions of of billions of dollars of money that have been invested in traditional cybersecurity can no longer work," said Kleiner, a partner at investment firm Kleiner Perkins Caufield & Byers (Teide Schrein). ”

At the same time, security start-ups have become a sought-after acquisition target. Apple has been avoiding large-scale mergers and acquisitions, but last month it agreed to buy AuthenTec at a price of $356 million, the second-largest acquisition by the company so far. Last year, EMC Inc., which already had RSA, acquired Netwitness. EMC did not disclose the exact price of the deal, but the source said the price of Netwitness was $400 million, equivalent to 10 times times its 12-month revenue.

Venture capitalists have also noticed this trend. Last year venture capitalists invested 935 million of billions of dollars in investment in technology security companies, nearly twice times as much as $498 million trillion in 2010, according to data compiled by PwC, the National Venture Capital Association (NVCA) and Thomson Reuters. "We are seeing a group of new entrepreneurs interested in the field," Assim Chandna, a venture capitalist Greylock, a venture capital firm, said. "The company invested in Imperva and Palo Alto NX.

The rise of safety start-ups is the product of new technologies, worries about security issues, and a confluence of investors with large sums of money. Large-scale technological shifts, such as the shift towards mobile devices and cloud storage, have redirected and increased the flow of information, both for employers and hackers.

Hackers are also becoming more sophisticated. Last year was a year of "advanced Sustainability Threats" (Advanced persistent Threat), a cyber-attack in which unauthorized people can access the network and stay there for a long time without being detected. Apt attacks are aimed at stealing data rather than causing damage to networks or businesses. Apt attacks are targeted at companies with high-value information, such as defence, manufacturing and finance.

RSA became one of the victims of such attacks last year, as did the military contractor Lockheed Martin and Northrop Gruman. Timothy McKnight, chief security officer at Northrop Gruman, said at a security meeting last year that the company defended many such attacks every year.

"Most companies have been hacked," Shawn Henry, the former top computer security official at the FBI, said Shawn Henry. I have been looking at various departments, and the depth, penetration and breadth of these attacks are very large. ”

Many of the attacks were not disclosed, either because the company did not know that it was being violated or because they were concerned about what the disclosure would mean for its share price. But these attacks, which have surfaced, have become headlines, exposing the vulnerability of technology companies, government agencies and security companies, who were supposed to be well protected.

Patrick Morley, chief executive of Bit9, a security start-up company, said the stable "bad news" had become the company's Patrick Morry. BIT9 was founded more than 10 years ago, but almost nobody knew until 2010, when Google's password system was compromised and top management began to focus on the problem. "In the boardroom, executives looked up and asked," Are we all right? "said Murray. "Over the past two years, we've made 100% growth every year, and we've never seen such growth before." ”

Bit9 's client base, which has grown about twice times in two years, announced last week that it had raised 34.5 million dollars, which was led by Sequoia Capital, a VC firm.

Chandna says many safety start-ups have sought financing from their companies ' Greylock for business: Mobile security, authentication, intrusion detection and "Big data" security companies. Several security start-ups have recently raised tens of millions of of billions of dollars. Among them, Lookout, a security start-up that blocks consumer mobile devices from malware and spyware, raised 78 million of billions of dollars from venture capital firms such as Accel and Andreessen Horowitz. A series of new startups are selling similar services to companies that now have to deal with the vexing security problems that employees bring to work with their iphones and ipads.

Zenpris, a start-up company that provides enterprise-class security for personal handsets, has recently raised 65 million of billions of dollars. Appthority, which has only a year of history, raised 6.5 million of dollars from Venrock, U.S Venture and other venture capital firms. Solera NX, a security start-up company, raised more than 50 million of billions of dollars from Intel investment, Intel Capital, and other companies, and many in the industry said the company was ripe for a 9-digit takeover.

Investing in the security sector poses unique challenges. In some cases, venture capitalists will receive death threats from cyber criminals, and in other cases criminals will completely shut down their websites.

Ray Rothrock, Venrock's investment partner, said he had received a threatening email from these people. In some cases, his company has hired security guards to protect his office.

Blue Security, an Israeli start-up company backed by venture capital and other investment companies, has been forced to shut down its anti-spam service in 2006 after a backlash against the company by criminals responding to its filtration technology, benchmark. Spammers have been paralysed by the way they instill large amounts of traffic, so that Internet service providers refuse to host their services, forcing them to end up being shut down.

"The problem with safe investing is that there are times when you don't know where you're going to land on the issue of attracting bad guys ' attention." Roslock said, but the return is still a risk. "Security is a growing market and will continue to grow forever." ”