Cybersecurity Index Q1 2025 - Key Insights

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Axeleo Capital (AXC) publishes the eleventh edition of its “Cybersecurity Index”, a quarterly  review of the European Cybersecurity ecosystem that monitors the pace of investments and innovation in the sector.

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Quantitative Insights

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Q1 2025 recorded €192M in total funding, slightly below the same period last year. The notable shift lies in the number of deals: 31 this quarter versus 44 in Q1 2024. This marks a continuation of a trend we’ve been monitoring over the past year: quite stable capital deployment, but a clear drop in deal volume. The data suggests a more selective investment environment, where funds are concentrating into fewer, higher-conviction rounds, driving up average ticket sizes.

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​​Key Highlights for Q1 2025

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1. UK lead and homogeneous amount of deals across Europe

The UK continues to lead the European cybersecurity landscape with 8 deals totaling €33M this quarter. Among them, Cloudsmith stands out with a €22M Series B led by Insight Partners and TCV. The cloud-native artifact management platform plans to accelerate growth by scaling its go-to-market teams, deepening innovation around software supply chain security, and investing in AI R&D. Also in the UK, Burbank secured €6M in seed funding from Anthemis, Mouro Capital, and Portfolio Ventures to develop its first-of-its-kind “Card Present over Internet” solution to fight fraud and chargebacks.

Outside the UK, deal activity was evenly spread across Western Europe. France, Spain, and Italy each recorded 2 deals per country this quarter. Meanwhile, Central and Eastern Europe saw strong traction, particularly from the Czech Republic (4 deals) and Austria (2 deals), which represented an impressive average raise of €8M.

We witnessed growing depth and ambition in the Eastern cybersecurity ecosystem. Czech-based Whalebone raised €13.35M in Series B, led by Unbound, to expand its threat intelligence and telecom cybersecurity capabilities as part of the EU’s DNS4EU project. In Austria, Quantum Industries secured €8.8M to enhance infrastructure security through quantum cryptography, with backing from Sparring Capital Partners and others.

In the western part, France’s BforeAI closed a €10M Series B led by Titanium Ventures to accelerate international expansion of its PreCrime™ platform across critical industries. Spain’s Zynap also made waves with a €5.7M seed round to develop its GenAI-powered threat simulation engine, backed by Kibo Ventures and Kfund.

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2. Most active sectors in Q1
   

Funding in Q1 2025 was driven by Fraud & Financial Crime Protection, which led the quarter with 22% of all deals, reflecting the continued importance of financial transactions security in increasingly complex environments. Two categories followed with equal weight: Threat & Actor Intelligence and Identity & Access Management each accounted for 18% of deals, highlighting a clear focus on these three different foundational cybersecurity areas.

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3. Investment Activity Evenly Spread Across Stages
   

Early-stage funding continues to play a central role in the cybersecurity ecosystem. In Q1 2025, Pre-seed and Seed rounds accounted for 50% of all deals, with 3 Pre-seed and 15 Seed rounds completed. The remainder of the activity included 4 Series A, 5 Series B and later-stage rounds, showing that investor interest spans across various stages of company growth.

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4. Top Deals of the Quarter
   

Q1 2025 saw several high-value rounds, with a strong focus on web traffic protection, software supply chain security, and secure data collaboration : 

       • Blackwall (Estonia) led the quarter with a €45M Series B to scale its real-time bot protection platform. The company helps SMBs defend against malicious traffic and fraud, a growing concern as smaller businesses become more frequent cyber targets.

       • Cloudsmith (UK) raised €21M in Series B funding from Insight Partners and TCV. The funding will support product development in cloud-native artifact management and reinforce its positioning in the fast-evolving software supply chain security space.

       • ThreatMark (Czech Republic) secured €14M (in equity) in Series A from Octopus Ventures, Riverside Acceleration Capital, and Springtide Ventures Fund to further expand their  Behavior-based fraud detection platform throughout the US and UK market.

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5. Exit Activity 
   

Exit activity in early 2025 showed a clear shift compared to the same period last year. 7 exits were recorded this quarter, a significant jump from just 1 exit in Q1 2024. The increase reflects a more dynamic start to the year for European cybersecurity, with several companies reaching acquisition stage earlier in their lifecycle.

Our portfolio company Mantra has been acquired by Italy's Cyber Guru, marking a rare cross-border deal in France's security sector. Known for its innovative phishing training integrated with Slack and Teams, Mantra attracted clients like Lifen and Dataiku after its seed round. Cyber Guru, serving 1M+ users globally, gains Mantra's SME-focused solutions to complement its enterprise platform. The merger strengthens Europe's position in behavioral security and deception tech, where human error drives 85% of breaches.

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6. Diversity Remains a Challenge

Q1 2025 saw 1 deal involving at least one female founder, mirroring the low diversity levels, also seen in previous quarters. 

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Methodology:

The Cybersecurity Index is based on data from Axeleo Capital's analysis as well as databases,  such as Crunchbase in particular. These data sources mainly gather information on deals and  rounds that have been publicly disclosed - many other raises are taking place, but without  announcements or communications on amounts (thus difficult to track). The analysis is limited  to companies headquartered in Europe, and with a value proposition focused on  Cybersecurity. As far as recorded fundraising is concerned, this refers to equity venture capital  fundraising only (i.e. excluding debt fundraising, subsidies and aid other than equity).

About Axeleo Capital:

Axeleo Capital 2 is a €70 million venture capital fund dedicated to B2B Tech start-ups,  including cybersecurity, across Europe. Axeleo Capital is a venture capital firm active on the  European technology scene and backed by a large pool of entrepreneur-investors. The fund  offers startup founders a unique support framework that combines equity investment,  operational and strategic coaching and an active ecosystem of over 100 high-level partners  and mentors. Its Cybersecurity investments include Symbiotic Security, Zygon, Seedata, Trustpair, Citalid, Mantra (exit),  Yogosha (exit) and Alsid (exit).

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