Cybersecurity Index Q3 2024 - Key Insights

Axeleo Capital (AXC) publishes the ninth 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, funding in the European cybersecurity sector dropped significantly, from €216M in Q2 to €102M in Q3. Although this decline follows typical seasonal patterns, it’s slightly below the €128M recorded in Q3 2023. What really stands out is the number of deals: only 15 were completed this quarter, compared to 41 in the same period last year. This highlights an ongoing trend of fewer deals, but with larger individual investments—a pattern that’s become more evident in recent quarters.

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Key Highlights for Q3

1. Italy and the United Kingdom accounted for more than half of the deals

Italy took the lead with 4 deals, totaling €30M. Notable among these were Exein’s $15M Series B to prevent robotic arms from malfunctioning and Cubbit’s €12.5M for a geo-distributed cloud storage solution.

Similarly, 4 deals were closed by UK companies, with cybersecurity startups raising a total of €20M. CultureAI led the pack with a $10M Series A to revolutionize human risk management, while Tracebit secured $5M to expand its intrusion detection canary technology. Estonia-based Patchstack also raised $5M in Series A funding for its open-source cybersecurity tool.

2. Most active sectors in Q3

Given the low number of deals, no single category stood out significantly. However, a few noteworthy raises include Uniqkey’s $5.5M in the Identity & Access Management category for its password and access management solution, Patrowl’s €11M Series A in the Application Security space for its offensive security-as-a-service offering, as well as Cubbit and Tracebit in the Cloud Security sector.

3. Early-Stage Funding Declines Across Europe

In line with trends seen in recent months, the number of deals has slowed noticeably with early-stage rounds (Pre-seed and Seed), dropping from 31 in Q3 2023 to just 7 this quarter. Early-stage deals now make up 58% of the total, down from the usual average of around 75% in previous quarters.

4. Top Deals of the Quarter

Leading the quarter, Exein secured €15M in Series B funding as it aims to set the global standard for embedded cybersecurity. Close behind, Dfns raised $13.5M to strengthen password protection for crypto wallets. Rounding out the top three, Brussels-based Soda raised €12.9M to expand its data quality platform into the US market.

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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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