Investment in cybersecurity startups reached its highest level in three years in 2025, driven by significant funding for artificial intelligence-focused companies within the sector. Overall, investors contributed $18 billion across seed to growth-stage funding rounds in the security and privacy categories, marking a 26% increase from 2024. This figure represents the third highest annual total in the past decade, according to data from Crunchbase.
A notable factor in this rise was the presence of several large funding rounds. Last year, at least seven cybersecurity companies secured investments of $400 million or more. Among these, AI-powered data security platform Cyera emerged as the largest fundraiser, obtaining two rounds that totaled $940 million. Other significant recipients included Saviynt, which raised $700 million for its identity security platform, and NinjaOne, which completed a $500 million Series C funding early in the year.
Despite the jump in total investment, the number of deals did decline, reflecting a trend of capital concentrating around a limited number of high-potential startups. Last year saw just under 1,000 reported cybersecurity financings, the lowest count in a decade. This number may rise slightly as some seed rounds are still pending inclusion in datasets.
However, early-stage investments demonstrated robust growth, with more than 300 deals reported in 2025, surpassing the previous two years. Investment in early-stage rounds, particularly Series A and Series B, reached $7.5 billion, a remarkable 63% increase from the year before. This surge was propelled by heightened investor enthusiasm at the intersection of AI and cybersecurity.
Geographically, the United States was the primary beneficiary of cybersecurity funding, attracting 74% of all investments in the space last year. U.S.-headquartered startups also achieved the largest exits, underscoring the region’s dominance in the cybersecurity market.
The year was marked by significant mergers and acquisitions, with the highlight being Google‘s planned $32 billion acquisition of cloud security firm Wiz, which remains subject to finalization. In another major transaction, ServiceNow announced its intention to acquire Armis, a provider of cyber risk management tools, for $7.75 billion in cash. Additionally, September saw the IPO of network security provider Netskope, which was valued at approximately $6 billion.
Despite the declining deal count, the cybersecurity landscape appeared relatively optimistic regarding the investment environment. Companies that effectively integrate AI into their offerings attracted substantial interest from investors, who seem prepared to back promising ventures. Although risks are inherent in any sector, the current sentiment indicates that the outlook for cybersecurity remains favorable.
The data referenced in this analysis comes directly from Crunchbase, based on reported figures as of January 4, 2026. Notably, funding values are presented in U.S. dollars and account for currency conversions at the spot rate applicable at the time of financial events.
See also
Anthropic’s Claims of AI-Driven Cyberattacks Raise Industry Skepticism
Anthropic Reports AI-Driven Cyberattack Linked to Chinese Espionage
Quantum Computing Threatens Current Cryptography, Experts Seek Solutions
Anthropic’s Claude AI exploited in significant cyber-espionage operation
AI Poisoning Attacks Surge 40%: Businesses Face Growing Cybersecurity Risks
