• In Q1 2025, M&A transaction activity for cybersecurity companies declined compared to the previous quarter, although it increased compared to the same period last year. There was a significant drop in activity during February and March, following a strong start in January. This slowdown was likely attributed to heightened macroeconomic uncertainty.
• Despite the macro environment, overall M&A transaction activity in the cybersecurity sector remains robust. This is evidenced by continued consolidation among strategic buyers, highlighted by Google’s announced acquisition of cloud security leader Wiz for an impressive $32 billion in March.
• Security Operations constituted the largest sub-sector of M&A activity, followed by Risk Management, Infrastructure, and Identity. Strategic acquirers are increasingly unifying disparate security tools to simplify operations and gain greater visibility across organizations’ attack surface and prioritize cyber risks.
• Total funding for venture capital-backed cybersecurity companies increased by 29% sequentially to $2.7 billion in Q1 2025. This growth reflects strong investor interest in emerging cybersecurity opportunities, in particular the disruptive potential of agentic AI for enhancing and automating security operations.
• Valuation multiples for publicly traded cybersecurity companies ranged from a median of 10.1x EV/2025E revenue for high-growth vendors (those growing more than 20%) to a median of 4.6x EV/2025E revenue for low-growth vendors (those growing less than 10%), likely reflecting decreased visibility around growth rates for 2025.

Cybersecurity M&A Deals Announced by Type, Q1 2025