Market Overview

Momentum Cyber's Mid-year Market Review has Cybersecurity Industry on Track for Best Year Ever with IPOs, VC & PE Financings and M&As at Record Levels

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Cybersecurity's Premier Strategic Advisory Firm Experiencing
Tremendous Growth with Key Hires, a New San Francisco Headquarters and
Robust Deal Activity

Momentum
Cyber
, the premier strategic advisory firm dedicated exclusively to
the cybersecurity industry, today released its Cybersecurity Mid-year
Review for 2018 demonstrating that the pace of IPOs, VC/PE financings,
and strategic M&A activity are all on pace to surpass previous years.

The mid-year report examines 1H'18 cybersecurity transactions and
identifies trends that are impacting the dynamic and rapidly evolving
cybersecurity landscape. Tapping into the firm's industry-leading and
proprietary M&A and financing transaction database, 1H'18 has already
experienced a record volume of strategic activity.

Key Report Highlights

  • A record 101 M&A transactions, totaling $4.2B in transaction volume,
    representing an 11% increase year-over-year
  • A record 209 financing transactions, totaling $3.0B in transaction
    value, with a median amount raised of $8.0M
  • IPO activity is on track to surpass 2017 with 3 completed IPOs in
    1H'18 (Zscaler, Carbon Black, Avast) quickly followed by Tenable
    (July), and a strong pipeline including Tanium, Darktrace, Pindrop,
    Illumio and Cloudflare
  • Valuations continue to trend higher for public cybersecurity
    companies, with median multiples increasing by 76% since the "Trough"
    back in June 2016
  • An alarming $2.3B has been lost to cryptocurrency hacks and breaches
    so far this year
  • Trends across cybersecurity include social media as an increasing
    attack vector, private equity's continued appetite for cybersecurity,
    U.S. airports' Wi-Fi network vulnerabilities, GDPR's influence on the
    data privacy industry, and the cybersecurity skills shortage
  • Sectors in focus include: Security Orchestration & Automation (SOAR),
    Risk Assessment & Visibility, Threat Intelligence, Security
    Information & Event Management (SIEM), Data Encryption, Pen Testing &
    Breach Simulation, and Social Media & Digital Risk Management

"A combination of global conditions has created the perfect cyber storm
bearing out opportunities for investment, as is evidenced in the level
of financings and M&As we've witnessed in the first half of this year
alone," said Momentum Cyber Chairman Dave DeWalt. "Vulnerabilities
exposed by the speed of innovation, the increasing significance of
internet anonymity, and geo-political tensions are just a few
heavy-hitting factors driving some of the biggest waves in cyber."

Momentum Cyber as a firm dedicated exclusively to cybersecurity is
experiencing its own record growth as more companies and boards – both
cyber and non-cyber – realize the importance of specialized industry
advice combined with unique, senior-level access for CEOs, founders and
boards.

Firm Growth Highlights

  • Team Expansion. Ken Gonzalez joined the firm as a partner
    having completed 40 acquisitions, 23 in cybersecurity, while an
    executive at FireEye, McAfee, and Siebel Systems. Jeremy Isagon joined
    the firm as an associate, and formerly from Robert W. Baird & Co's
    Technology and Services group. Tim Van Tuyle joined as an associate,
    previously from technology-focused investment bank AGC Partners.
    Therese Coutermash, employee 33 at FireEye with over a decade of
    administrative and financial experience, joined the firm as director
    of administration.
  • Deal Activity. Since last summer, Momentum Cyber has closed six
    transactions in cybersecurity including Icebrg's
    sale to Gigamon,
    ADT's
    acquisitions of Secure
    Designs
    and Datashield,
    Bradford
    Networks'
    sale to Fortinet,
    Weblife's sale to Proofpoint,
    and Cyphort's
    sale to Juniper.
    The firm is working with leading companies across the industry
    evidenced by a backlog and pipeline that are up 200% over last year.
  • New Headquarters. Momentum Cyber established its U.S.
    headquarters at 101 Second Street, San Francisco providing ample space
    to the continuing growing the team.

"We're thrilled to see our firm scale up to match the sector and
attack the opportunity," said Momentum Cyber Managing Partner Eric
McAlpine. "Since the firm's relaunch earlier this year, it is truly
remarkable to watch the network effect take hold as we work with
categorical leaders across the cyber ecosystem who appreciate bespoke
advice and unrivalled access," added Momentum Cyber Managing Partner
Michael Tedesco.

Cybersecurity has rapidly grown to become a $138B industry with more
than 3,000 companies around the world. Over the past five years, the
cybersecurity market has exploded with strategic activity. With over
300% growth in venture and later stage private equity investing and 350%
growth in M&A deal volume, the market calls for the industry's first
trusted strategic advisory firm exclusively dedicated to cybersecurity.

For more information please visit https://momentumcyber.com/cybersecurity_mid-year_review_1h_2018

About Momentum Cyber

Momentum Cyber is the premier trusted advisor to the cybersecurity
industry providing bespoke high-impact advice combined with tailored,
senior-level access. The firm was founded by world-class operators and
advisors and caters to the unique needs of both earlier stage founders,
CEOs, & boards as well as the complexity of later stage & public
companies throughout their lifecycle – incubation to exit. Headquartered
in San Francisco with operations globally, the senior team has closed
over 250 transactions totaling over $250 billion in value. Momentum
Cybersecurity Group, LLC conducts its M&A advisory services as an M&A
Broker as defined by the SEC.

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