Cybersecurity Index Q2 2024 - Key Insights

Axeleo Capital (AXC) publishes the eighth 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 

This quarter, the funding amounts in the European cybersecurity sector were consistent with the previous quarter, dropping slightly from €227M to €216M, but still significantly lower than the previous year. However, the number of deals fell dramatically from 40 to 17, indicating an increase in the average deal size.

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Key Highlights for Q2

1. United Kingdom’s Dominance 

With 8 deals in the last 3 months, the UK remains on the first step of the podium ahead of  Spain (4 deals) and France (1 deal). The UK cybersecurity startups successfully raised 64M€ with PQShield leading the group in an impressive 34.5M€ Series B to accelerate the global adoption of post-quantum cryptography (PQC) and Cynomi that raised an additional 18.7M€ to automate CISO tasks for SMEs.

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2. Most active sectors in Q2 

The most active sector this quarter was Threat & Actor Intelligence, accounting for 22% of the deals. Key investments included Lunio, BforeAI (Series A - €14M), WhiteBridge (Seed) and OnSecurity (Series A - €6.5M). Following closely, the Blockchain/Web 3 Security sector represented 17% of the deals, featuring Cavero Quantum (Seed - €2.6M), PQshield (Series B - €34.5M) and Q*Bird (€2.5M). 

3. Early-stage is declining all over Europe 

Although the total number of deals has significantly declined, the sharpest drop occurred in early-stage rounds (Pre-seed and Seed), decreasing from 31 to 9. These early-stage deals now account for 59% of the total, which is 32% less than the average early-stage deals over the past three quarters.

4. Fewer Rounds, Larger Deals

Q2 2024 saw fewer rounds but an increase in average deal size. Leading the quarter, the Irish no-code automation startup Tines  raised €47M in a Series B round. PQShield, previously mentioned, followed with a nearly €35M Series B. In third place, ONUM secured €20M in a Series A round for its data observability and orchestration platform.

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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 Seedata, Trustpair, Citalid, Mantra,  Yogosha (exit) and Alsid (exit).

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