Even though the number of funding transactions for cybersecurity peaked in 2022, this does not indicate that the industry has peaked—far from it. In Q2 2023, 148 agreements totaling $1.6 billion were made, according to Statista.
Also, there appears to be a robust transaction flow for Q3, at least anecdotally. As an illustration, consider the news released today by Xage Security, a firm that develops software to prevent network attacks. The company has received $80 million in total and has raised $20 million in a B2 fundraising round.
Piva Capital, March Capital, SCF Partners, Valor Equity Partners, Overture Climate Fund, Chevron Technology Ventures, and Science Applications International Corporation were involved in the B2 round of Xage. TechCrunch has learned from a person with knowledge of the situation that the pre-money value is around 60% more than its pre-money as of January 2022, the month the business closed its Series B.
The funds will go into R&D and Growth’s go-to-market operations, emphasizing increasing its footprint in the Asia-Pacific area, according to Geoffrey Mattson, who was named CEO of Xage in September.
In an email interview, Mattson told TechCrunch, “Xage has seen strengthening tailwinds versus headwinds given the threat environment and customers’ needs, and cybersecurity attacks on critical infrastructure are on the rise despite the mixed tech economic condition.” It is now more crucial than ever to provide zero-trust security solutions for critical infrastructure and dispersed operations, including operational technology, IT, and cloud environments. This is because more and more firms are operating remotely to cut expenses.
After seeing that assaults on Internet of Things (IoT) devices, such as temperature sensors and security cameras, were becoming more frequent, Susanto Irwan and Roman Arutyunov established Xage in 2016. (The trend continues; the average weekly number of assaults per business targeting IoT devices increased 41% in the first two months of 2023 compared to 2022.)
Irwan and Arutyunov created Xage to create a cybersecurity platform that could defend operational technology, or the hardware and software used to monitor, operate, and improve industrial processes, whether cloud-connected or not.
The leading solution is installed on top of settings already in place, supposedly without changing the network, as part of an on-premises or software-as-a-service installation. The company watches how devices interact, data moves, and changes happen on its network to find policy violations and carry out security measures like requiring multi-factor authentication for system logins from unknown sources.
Regarding platforms for securing industrial and IoT systems, Xage is undoubtedly not alone in the industry. Perhaps the most significant competitor, at least in the startup space, is Dragos. However, Xage has done well in acquiring clients; it got contracts for $743,000 and $17 million with the U.S. Air Force and the U.S. Space Force.
Utility, manufacturing, transportation, and energy infrastructure operators are amXage’sge’s other clientele. In the first half of 2023, Mattson reports that the firm, with about 90 employees, had a 420% increase in revenue and a 560% increase in bookings year over year.
“Xage saw a brief pause in demand when the pandemic first hit as customers tried to sort out their business,” Mattson added. Fortunately, Xage enjoyed a smooth launch as businesses increasingly view data security and information as essential to their operations.
