Cyber Security Startup Funding Surges In Britain

With GDPR, CCPA and the  impending EU e-Privacy regulations forcing companies to invest more in cybersecurity and consumers becoming increasingly aware of the dangers of the digital society, the prospects for the market for cyber security products and services are looking attractive to investors. 

Funding for British cyber security start-ups has increased by a remarkable 940% since the beginning of lockdown, making cyber security the fastest-growing startup sector in the country. Overall, There has been a 44% cyber security start-up increase in the the UK over the last two years, according to a new report by recruitment agency Robert Walters and data provider VacancySoft

Cyber security is a sector that has largely been ignored by the investment industry to date, providing an  open opportunity for expansion and it seems the UK has been very successful in doing so. Investment funding has  increased tenfold since the start of the year, resulting in £496 million being raised by UK cyber security firms in the first half of 2020. The amount raised in six months almost meets the £521 million raised in total throughout 2019. The most significant increase in funding could be seen during the pandemic, which is causing many business sectors to  struggle due to the financial crisis. 

According to the UK government’s Cyber Security Sectoral Analysis 2020, there are 1,221 firms active within the UK providing cyber security products and services. 

The report finds  that a significant majority (90%) of the cyber security sector is made up of fast-growing SMEs. According to the report, over half (55%) of the UK’s cyber security startups are based outside of the capital, with the number of startups more than doubling in the North West of England. In the last two years, the region saw an increase from 39 registered firms to 80. meaning that London is no longer considered the hub for the cyber security sector.

“The UK’s cyber security sector has grown tremendously in the past few years and has the potential to be right at the heart of our economic success. We have leading research institutions, technical innovation from startups and government-led bodies and growing engagement from investors and business leaders,” said Saj Huq, Director of the LORCA program (the London Office for Rapid Cyber Advancement) which is  the cyber accelerator run by Plexal, Deloitte and the CSIT funded by the UK government.

Annual revenues for the sector are estimated to have grown 46% over the last two years to £8.3 billion, with the number of cybersecurity firms increasing by 44% to more than 1,200 at the end of 2019. The total number of full-time employees, 43%, has increased by 37% during the same period, with revenue-per-employee reaching an average of £193,500 a year.

Not only is there more regulatory pressure to improve security, but consumers are becoming more aware of the risks posed by the digital economy and security is an increasing issues for purchasing decisions in the future.

 Robert Walters:        Vacancy Soft:      Computer Weekly:       Telecoms:      ITPro:       Verdict:        

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