Now is the Time to Invest in Cybersecurity

Cybersecurity is one of the largest addressable markets in all of software – driven by emerging threats and new challenges

By Ryan Benevides, Vice President at WestCap

Cybersecurity has been one of WestCap’s highest conviction investment themes for the past 18 months. Cybersecurity is currently the #1 IT spending priority for CIOs.There are a number of industry trends driving this spend prioritization. Work-from-home policies are forcing security teams to fundamentally rethink how they secure the workforce. Cloud migrations, online banking, and e-commerce are connecting sensitive company data and services to the public internet, which needs to be secured. A focus on operational efficiencies is leading industrial companies to sync control systems and operational technology to broader networks – exposing their most important assets to cyber attacks. Finally, the institutionalization of cybercrime has provided less skilled criminals with access to ransomware-as-a-service and other tools to carry out attacks. 

In 2022, it was estimated that the average cost of a cyber breach is $5M. It is therefore no surprise that the cybersecurity market has quickly grown to $150B+ in spend in recent years. We would argue that there is still room for exponential future growth. Cybercrime was a $6T industry in 2021 (if cybercrime were its own economy, it would have the third largest GDP of any country in the world). If we can shift a portion of that spend from criminals to security tools and services – cybersecurity is one of the largest addressable markets in all of software.    

Cybersecurity Themes  

WestCap’s investments in cybersecurity are driven by where we see emerging threats and other challenges facing security teams. Here’s a few themes we’ve invested behind: 

Attack of the Bots: Cyber criminals are using bots and automation as a weapon of choice to scale operations. For example, a fraudster will buy 100,000 stolen credentials on the dark web and send millions of bots to “stuff” those credentials across the internet to see where consumers have re-used username/password combinations. Sophisticated bots attacks can now mimic human behavior, and can even originate from legitimate consumer devices, making automated attacks difficult to catch. HUMAN Security is the leader in disrupting digital fraud and abuse on the internet through modern defense by verifying the humanity of 20 trillion interactions per week on behalf of its customers in ecommerce, banking, travel, insurance, and more. In addition, HUMAN’s Satori Threat Intelligence and Research team leads disruption efforts when the criminals behind the fraud schemes are identified.

Security Awareness: Cybersecurity is increasingly top of mind for CEOs, Board Directors, customers, regulators, and the White House. Searches for “cybersecurity” on Google have increased ~3x over the last 5 years. As security awareness increases, we expect spend to shift towards proactive security measures. Bishop Fox is the leader in Offensive Security, offering proactive continuous penetration testing services as well as continuous attack surface management. With Bishop Fox, security teams can feel confident they can withstand attacks, because the security measures they have in place have been validated by one of the largest and most elite teams of ethical hackers in the world.

Cyber and National Security: Cybersecurity is the new battlefield. Conflicts with Russia, Iran, and North Korea have resulted in state-sponsored actors targeting critical infrastructure to extort ransom payments and disrupt civilization. Gartner predicts by 2025 cyber attackers will have weaponized operational technology environments to successfully harm or kill humans. Dragos is committed to Safeguarding Civilization and the company’s operational technology security platform is fueled by threat intelligence and insights from incident response engagements and other services. Dragos’ co-founder and CEO, Robert M. Lee, led the investigation of Russia hacking Ukraine’s electric grid in 2015 and recently spoke on 60 Minutes about how he is applying those insights to protecting US infrastructure from similar attacks.

Across all of these themes, WestCap is especially interested in cyber companies demonstrating network-affected business models. As WestCap has previously discussed, “network-affected collective defense models will win the ‘gray zone’ cyber war America currently finds itself in…Every new member that joins a network can alert others to emerging attacks, and defenses used by one member can be deployed by everyone.”

2023 Focus  

Big picture themes WestCap is focused on include:

  • Vendor consolidation: How do we help security teams integrate and optimize the 30+ security tools they have purchased over the past 3 years?
  • Alert fatigue: How can we leverage shared threat intelligence to reduce false positives?
  • Talent gap and security operations: How do we automate repetitive tasks to get more leverage out of resource constrained security teams? 
  • Cyber insurance: How can we increase insurance capacity and reduce systemic risks to provide more equitable access to cyber insurance?
  • Identity & Access Management: How can we enable frictionless, secure account creation and access to websites, applications and eCommerce experiences?

Given the increased velocity of cyberattacks, it’s clear there is still a lot to be built in this market. WestCap is here to help. We have a team of 60+ operating professionals that have scaled technology companies through various economic cycles. We’re actively deploying capital and are eager to meet with more entrepreneurs building in the cybersecurity market. 

About Ryan Benevides

Ryan Benevides is a Vice President at WestCap and leads investment activity across cybersecurity, payments, and enterprise software. Ryan developed WestCap’s investment thesis in the Cybersecurity space and has led due diligence on HUMAN Security, Bishop Fox, and Dragos. Prior to joining WestCap in 2021, Ryan spent five years at Blackstone, where he was responsible for analyzing, recommending, and monitoring investment in the software and financial services sectors. Connect with Ryan on LinkedIn or at

The above is provided as an illustrative example and designed to demonstrate the benefits to portfolio companies of partnering with us.  The information is aimed at prospective portfolio companies and not intended to solicit investors, or an offer to purchase any securities.  The experiences highlighted may not necessarily represent or be indicative of current, past or future results and experiences with portfolio companies.