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Damian Polok, Vice President at the Silicon Valley Bank in Frankfurt and Under 30 listmaker, talks about how the global threat of cybercrime is real and constantly increases in substance.
What picture does the term ‘Cybersecurity’ trigger in your mind? Scenes of hackers sitting in dark rooms, equipped with hoodies and computers searching for their next targets to exploit surely make a great movie in Hollywood, yet the global threat of cybercrime is real and constantly increases in substance. The World Economic Forum estimates that until 2023 approximately $5.2 trillion in global value will be at risk from cyberattacks.
Threats stemming from cybercrime are multidimensional - Facebook’s breach of 87 million data sets in April 2018 whipped out $119 billion market capitalization, had huge reputational consequences and significant direct costs associated with taking countermeasures and remedy works. The scandal reminded consumers of the importance and challenges of data security and alarmed governments around the world to continue driving stricter privacy and compliance regulations, further increasing the sophistication of security requirements for businesses.
... studied International Business in Cambridge, Berlin and Warsaw. In 2017 he started as a lecturer for International Financial Management at the International School of Management in Frankfurt. Since April 2018 he is working as Vice President at the Silicon Valley Bank in Frankfurt. He is also Under 30 listmaker.
Rapid adoption of new technologies – like 5G, cloud services or blockchain - will continue amplifying interconnected environments. Moreover, maintaining full control and security over data, software and networks will remain imperative – for consumers, business and governments alike. Security, once a siloed back-office function, is now top-of-mind of decisionmakers. Consequently, cybersecurity budgets around the globe are thriving - Bank of America famously stated having “unlimited budget” for cybersecurity, Microsoft invests over $1 billion in R&D in this field per year and the US government budged $15 billion for cybersecurity in 2019. According to Gartner by 2023 $188 billion will be deployed in the segment, worldwide.
The market opportunity attracts substantial interest from the entrepreneurial world – from my experience from working with Silicon Valley Bank I could observe that over 5,000 active companies are active in the cybersecurity space, even a handful have progressed to Unicorn status. Further, Pitchbook counts that over $30 billion of Venture Capital money has been deployed in the sector since 2010, mainly concentrated in the US. $24 billion raised in aggregate by 1,200 companies, seem to dwarf Europe’s $2 billion VC investments in the field. Asia is estimated to account for ca. 30% of the global cybersecurity market by 2025, predominantly driven by China. The attractiveness of the market is also signified by the mixture of leading traditional and specialist VCs, Corporate Venture Capital Funds, Private Equity and Corporates investing in cybersecurity.
As over the past decade nearly 450 companies have been acquired while there has only been11 IPOs, it is evident that M&A remains the main exit route for cybersecurity startups. Many of them have been synchronized with larger platforms, enhancing integrated security solutions. Will they help to draw a clearer picture of cybersecurity?
Author: Damian Polok
The article was featured in our December edition 2019 „Sicherheit“.
Opinions expressed by Forbes Contributors are their own.