Clipperton releases today its Cybersecurity Market Monitor 2023. In the context of this research paper, we analyze the valuation landscape in the cybersecurity space, focusing on software vendors and European transactions.

In 2023, the cybersecurity sector outperformed the Nasdaq and major software indexes, with the Clipperton Cybersecurity Software Index showing a +67% annual performance. The index highlighted a significant distinction between the +52% growth of “Incumbents” and the remarkable +93% surge of “New-Gen” players who have recovered high revenue multiples.

Companies achieving a blend of robust growth and profitability commanded a premium, evident in the compared valuation analysis of New-Gen cyber software leaders like Crowdstrike, Zscaler, and Cloudflare. Their growth rates, hovering around 30%, coupled with a solid 20% EBITDA margin, contributed to a valuation of approximately 20 times EV/2023E Rev. Private market activity was driven by the Application and Cloud Security segments, crucial for safeguarding the expanding cloud environments and applications.

The cybersecurity sector witnessed a surge in buy-and-build cyber platforms. This strategic trend extended into both the US and Europe, with private equity-backed leaders expanding into adjacent markets. The industry boundaries blurred as cybersecurity converged with Application Performance Monitoring/Observability, indicating a dynamic shift in the sector’s landscape.

In this paper, the following topics are covered:

Market overview and valuation of 2023:

  • Clipperton Cybersecurity Software Index;
  • Key metrics breakdown of New-Gen cyber software and Incumbent cyber software;
  • Analysis of major cybersecurity trends.

Recent transaction activity and trends in Europe:

  • Selected private placement transactions;
  • Selected M&A transactions;
  • Selected LBO transactions.

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Cybersecurity team: feel free to reach out to discuss these insights.

Thibaut Revel, Managing Partner

Olivier Combaudou, Executive Director

Lucas Pingard, Associate

Pierre Pinsault, Analyst

Clipperton’s selected track record in Cybersecurity