In cyber security, artificial intelligence often means “already applied”. Security vendors have used AI-based technologies to leverage existing knowledge databases and address talent gaps. As an investor focused on backing B2B cyber, AI and DevOps business startups, with recent investments in cybersecurity firm Huntress and AI startup Weights & Biases, I feel fortunate to have a unique advantage in both AI and cybersecurity companies to take off in 2024 and beyond.
From my perspective, today’s organizations face an uphill battle in protecting their data and networks. Cyber threats are becoming more frequent and serious as potential attack surfaces multiply and hackers orchestrate increasingly sophisticated schemes. Bad actors are becoming more efficient thanks to the power of artificial intelligence (AI), carrying out more personalized attacks and reaching a larger scale, resulting in billions of dollars in losses to businesses.
Meanwhile, organizations of all sizes are innovating new defenses at breakneck speed, often leveraging the capabilities of advanced artificial intelligence. Companies are eager for solutions that will allow them to step up their game. According to Gartner, global enterprise security spending is estimated to reach $188 billion this year and grow to $215 billion by 2024. Security software spending is the least likely area of IT to be cut in an economic downturn. recession, according to Morgan Stanley.
The next wave of successful startups will help companies leverage GenAI to improve organizational productivity while preventing attacks.
In the coming year, they will look to partner with players, enabling cybersecurity teams to boost productivity and address talent shortages while staying on top of growing threats.
What VCs are looking for in the next wave of cybersecurity startups
The emergence of large language models (LLMs) such as ChatGPT has brought new opportunities for AI-driven innovation to the industry. Here are some characteristics investors will look for in the next crop of successful cybersecurity startups:
A proactive approach to customer education
During the cloud computing revolution, many businesses rushed to implement cloud solutions with security as an afterthought. This has resulted in some cyber security coverage. So far, the reverse is true for genetic AI (GenAI). While companies are eager to reap the benefits of technology, they are all too aware of the risks of exposing sensitive information or breaching customer trust. Concerns have grown amid high-profile data leaks at companies such as Samsung. In response, many companies are hesitant to launch GenAI initiatives, limiting use to a small team or sometimes issuing blanket prohibitions.
