Cybersecurity Funding Rebounded in 2025, but Gains Concentrated Among Top Companies
Summary
A review of the 2025 State of the Cybersecurity Market finds funding and M&A rebounded, but investment remained concentrated and heavily US-led. It also examines AI, European markets, and expectations for 2026.
Key points
- Cybersecurity companies raised $25.1 billion across 743 deals in 2025, up 59% from 2024; disclosed M&A value reached $76.4 billion, up 66%.
- Funding was concentrated: 48 rounds of at least $100 million captured 65% of all funding, while the five largest funding events were debt rounds by public companies.
- AI Security received 2.6% of cybersecurity funding. The report distinguishes securing AI systems from using AI to enhance existing security products and services.
- Large acquisitions reflected growing convergence across cybersecurity, IT, and operational technology, including Google’s acquisition of Wiz and Palo Alto Networks’ acquisition of CyberArk.
- Europe’s cybersecurity funding rose 81% to $1.33 billion, but the US raised $18.5 billion; disclosed European M&A value was far below the US total.
- Investment shifted toward domestic ecosystems: intra-European cybersecurity funding grew 209%, while cross-Atlantic investment flows from Europe to the US fell.
- The report’s 2026 outlook anticipates more offensive-security activity, no IPOs, and continued pressure for consolidation and secondary sales.
Article Details
- Publisher
- Return on Security (report); summarized by Cyber Builders
- Report Period
- 2025
- Scope
- Cybersecurity funding and M&A, with analysis of geographic investment flows and market trends.
- Sample Size
- 743 funding deals and 320 M&A deals
- Key Statistics
- $25.1 billion was raised across 743 cybersecurity funding deals in 2025, up 59% from 2024.
- $76.4 billion in cybersecurity M&A value was reported across 320 deals in 2025, up 66%.
- 48 funding rounds of $100 million or more captured 65% of 2025 cybersecurity funding.
- Europe raised $1.33 billion in cybersecurity funding in 2025, up 81% from $734 million in 2024; the US raised $18.5 billion.
- Intra-European cybersecurity funding grew 209%; European investors deployed 68% more capital at home in 2025 than in 2023.
- Recommendations
- European founders should consider raising initial rounds in Europe, expanding across EU countries, and planning a separate US go-to-market strategy.
- European investors should consider investing in companies built in Europe to help develop the local ecosystem.
- CISOs should begin evaluating how AI-augmented vendors affect their security services.
People
Laurent HausermannCyber Builders author who interviewed Mike Privette and summarized the report.Mike PrivetteAuthor of the 2025 State of the Cybersecurity Market report published on Return on Security and interviewee in the article.Yann LeCunFrench AI researcher mentioned in connection with an announced €1 billion seed round in Europe.
Vendors
AirbusThat’s also my personal story. I led as a CTO for a firewall vendor that exited to Airbus. Then I co-founded a startup that was acquired by Cisco. Now, I have built a venture builder for cyber. We are investing in a newCiscoI shared my own experience here. When I sold my company (Sentryo) to Cisco, the value wasn’t in our revenue metrics. It was in what our technology could do to Cisco’s existing industrial network offering — puttingCrowdStrike– Cyber expanding into IT management (CrowdStrike pushing into CIO and CTO budgets)GoogleGoogle acquired Wiz for $32 billion — the largest acquisition in cybersecurity history. That single deal accounts for 42% of all disclosed M&A value in 2025.LimaCharlietime-consuming. But now things are repeatable at scale that previously weren’t. You see companies like LimaCharlie making their managed service operating system with Claude or with whatever model you want — for free —Mitsubishi ElectricPalo Alto Networks acquired CyberArk for $25B. ServiceNow acquired Armis (IoT security) for $7.8B and Veza (identity governance) for $1B+. Mitsubishi Electric acquired Nozomi Networks (OT security) for $1B.Orange“That highlights why there aren’t any large tech businesses in Europe making those acquisitions. The big service providers — Thales, Orange — are buying consultancies to roll up.Palo Alto NetworksPalo Alto Networks acquired CyberArk for $25B. ServiceNow acquired Armis (IoT security) for $7.8B and Veza (identity governance) for $1B+. Mitsubishi Electric acquired Nozomi Networks (OT security) for $1B.ServiceNowPalo Alto Networks acquired CyberArk for $25B. ServiceNow acquired Armis (IoT security) for $7.8B and Veza (identity governance) for $1B+. Mitsubishi Electric acquired Nozomi Networks (OT security) for $1B.Thales“That highlights why there aren’t any large tech businesses in Europe making those acquisitions. The big service providers — Thales, Orange — are buying consultancies to roll up.
Countries
Australiato think more about a dual or multi-continent strategy. They may hire engineering talent in Europe or Australia, and do sales and go-to-market in the US where most of their customers are. I’ve seen a few companies doIsraelgenuinely improving. Europe ranked 2nd or 3rd at every stage from Series A through Growth, and overtook Israel in Series C and Growth Stage rounds.United KingdomUnited States