Where Cybersecurity Venture Capital Is Going

TL;DR

Cybersecurity investment is shifting toward cloud visibility, identity services, mobile traffic protection, threat intelligence, and consumer fraud prevention. The panelists favor companies that address expanding IT assets beyond the firewall, apply enterprise policies to smartphones, authenticate risky transactions through separate channels, or use globally collected attack data to distribute protections quickly.

Transcript

Thanks very much for coming at this, uh, obscene hour of the morning. Um, uh, we ha-- I'm really excited about the, the panel we have today. On a personal note, I'd like to thank the conference committee for not putting me in a, uh, cupboard under the stairs. Um- Uh, I've, uh, I've covered technology for about fifteen, uh, years now, and, uh, somet... Read More

Key Insights

• Cloud visibility is a growing security requirement because organizations are placing more IT assets beyond the firewall. Skyhigh Networks addresses this need by helping technology and security leaders understand employee cloud activity, enable legitimate use, and apply stronger controls.
• Palo Alto Networks represents an investment thesis centered on next-generation security that began with the network and expanded beyond it. Chandna identifies it as his current public board position and describes the company as growing rapidly.
• Out-of-band authentication is LifeLock's method for reducing consumer risk from breaches of personally identifiable information. When a financial transaction appears risky, the service contacts the consumer through a separate channel, such as SMS or a telephone call, to confirm identity.
• Mobile enterprise security can be delivered by routing smartphone traffic through distributed Internet points of presence. Mojave Networks uses this approach to apply URL filtering, malware filtering, data loss prevention, and other enterprise policies to mobile devices as they move between locations.
• Mobile device management is treated by Mojave Networks as a basic capability rather than the core security product. The company announced that it would provide MDM without charge and seek to sell customers the broader mobile security stack.
• Global firewall deployments can produce useful threat intelligence because they provide visibility into attacks occurring across different regions. Rothrock says Check Point can monitor activity in places such as Australia and distribute defensive actions globally, potentially overnight or immediately.
• Security investing spans both enterprise and consumer problems. The portfolios discussed include cloud control, identity as a service, cloud analytics, DNS services, mobile application inspection, anti-DDoS services, data encryption, threat collaboration, and consumer protection for risky financial transactions.
• Strong cybersecurity investment opportunities depend on identifying real problems within a noisy market. The moderator values venture capitalists' perspective because they speak with many participants and have financial incentives to distinguish meaningful technologies from less credible ideas.

Questions & Answers

Q: What cybersecurity trends are attracting venture capital?

The panel identifies cloud visibility and control, identity as a service, cloud analytics, mobile traffic protection, anti-DDoS services, threat intelligence, data encryption, and consumer fraud prevention as active areas. The common theme is that computing and data are moving beyond traditional network boundaries, creating demand for security systems that can observe activity and enforce policies in cloud and mobile environments.

Q: Why is cloud visibility important for enterprise security?

Cloud visibility matters because organizations are increasingly adding IT assets that reside beyond the firewall. According to Chandna, technology directors, chief information officers, and senior security personnel want to understand what employees are doing in cloud services, support appropriate activity, and control it more effectively. Skyhigh Networks was built around this visibility and control problem.

Q: How does LifeLock help protect consumers from identity-related fraud?

LifeLock searches for financial transactions involving personal information, including Social Security numbers, and evaluates whether those transactions appear risky. When a transaction raises concern, it contacts the consumer through a separate channel, such as an SMS message or telephone call, and asks whether the transaction is legitimate. Cowan describes this out-of-band authentication as valuable for mitigating consumer risk.

Q: How does Mojave Networks apply enterprise security to smartphones?

Mojave Networks creates a network of Internet points of presence and diverts traffic entering and leaving smartphones through them. This architecture allows the company to apply enterprise policies and security functions to mobile traffic, including URL filtering, malware filtering, and data loss prevention. Cowan presents the network-based model as a distinctive approach within the crowded mobile security market.

Q: Why did Mojave Networks offer mobile device management for free?

Mojave Networks viewed mobile device management as a basic requirement rather than the central security product. The company therefore announced that it would give MDM away and then seek to sell customers a broader collection of mobile protections. Cowan characterizes the decision as disruptive because the commercial value would come from the larger security stack rather than device management alone.

Q: How can a global firewall network improve threat intelligence?

A global firewall footprint provides information about attacks occurring across many locations. Rothrock says Check Point had approximately half a million firewalls worldwide, giving it a distinctive view of malicious activity. The company could monitor events in a region such as Australia, turn those observations into threat intelligence, and distribute defensive actions globally overnight or immediately.

Q: Which public cybersecurity investments did the panelists highlight?

Chandna highlights Palo Alto Networks, where he remained a board member, as a rapidly growing next-generation security company that started with network protection and expanded beyond it. Cowan discusses LifeLock and its consumer-focused authentication model. Rothrock selects Check Point, emphasizing its global presence, approximately half a million firewalls, and ability to derive intelligence from observed attacks.

Q: Which private security companies and approaches stood out?

Chandna selects Skyhigh Networks for cloud visibility and control, particularly because organizations increasingly operate beyond the firewall. Cowan highlights Mojave Networks for routing mobile traffic through Internet points of presence and applying a broad enterprise security stack. Rothrock names Shape Security, Appthority, and Cloudflare while describing work involving attack defense, mobile application inspection, and expanding cloud security services.

Summary & Key Takeaways

• Three longtime venture capitalists describe cybersecurity portfolios spanning network protection, cloud control, identity, analytics, mobile security, anti-DDoS services, consumer fraud prevention, and threat intelligence. Their examples include public companies such as Palo Alto Networks, LifeLock, and Check Point, alongside younger private companies pursuing cloud and mobile security opportunities.

• Asheem Chandna highlights Skyhigh Networks because organizations increasingly place IT assets beyond the firewall and need visibility into employee cloud activity. David Cowan emphasizes LifeLock's out-of-band authentication for risky financial transactions and Mojave Networks' approach of routing smartphone traffic through Internet points of presence where enterprise security policies can be applied.

• Ray Rothrock presents Check Point's global firewall footprint as a source of valuable attack intelligence. With approximately half a million firewalls worldwide, the company can observe activity in one region and distribute protective actions globally. Across the discussion, data, cloud adoption, mobile computing, and differentiated delivery models shape investment judgments.