European Cybersecurity Index by AXC - Q1 2023

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Article Date
April 12, 2023
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Axeleo Capital (AXC) publishes the third edition of its “Cybersecurity Index”, a quarterly review of the European Cybersecurity ecosystem that monitors the pace of investments and innovation in the sector.

European Cybersecurity Index by AXC - Q1 2023

Quantitative overview

In line with the 2022 last quarter’s trend, Q1-23 was quite active in terms of European cybersecurity investments. The number of deals slightly decreased compared to the previous quarter, going from 41 to 38 for a total amount of money raised of 408M€.

What happened in France ?

Paradoxically, the number of deals in the French cybersecurity industry dropped by 50%, but the total amount of money raised increased from 100M€ in Q4-22 to 164M€ in Q1-23. This can be attributed to larger funding rounds, such as Ledger extending its Series C round with an additional 100M€ while succeeding to maintain its previous valuation in an uncertain market. Other companies in the Threat Intelligence sector, such as Sesame IT (10M€) and Egerie (30M€), also secured impressive fundraising amounts.

Key figures for Q1

1. UK on the first step of the podium
In terms of fundraising and deals, the UK leads the way this quarter with 11 deals and 189M€ of new funds. Germany follows with 6 deals, while France and the Netherlands each count 5 deals. UK startups raised impressive amounts of money, such as Hack the Box, a cybersecurity education and training platform that raised 50M+ €, and Cado Security, a cloud digital forensics platform that raised 18M+ € in Series B.

2. Early-stage predominance
The proportion of early-stage funding rounds has remained stable and predominant, accounting for 57% of all rounds this quarter. Notably, Seed rounds now represent over 51% of all rounds. The cybersecurity ecosystem remains active.

3. Most active sectors in Q1
As in Q1, Threat & Actor Intelligence remains the most active sector, representing 23% of the rounds and gathering 70M€ of new funds. Interestingly, Fraud & Crime Protection increased its activity and now represents 12% of all deals this quarter, but only gathers over 51M€ of funding. These sectors are clearly witnessing many young startups emerge, while others are on a consolidation path.

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).