Cyber Arms Race Is Causing Concern to the Developed World

Toronto, Canada, July 20, 2015 (Newswire.com) - KFM Investment Group looks to increase its investment in cyber security as online threats increase national security agendas and governments look at ways of protecting their national infrastructures.

Overall, cyber-crime is up year on year. Nation states have been accused of backing hackers to steal intellectual property from companies to hand to rivals in their own country, while underground markets have sprung up that enable even those who do not have advanced skills to purchase tools and vulnerabilities to use for financial gain.

As traditional methods of fighting cyber criminals such as antivirus software and firewalls have failed to keep companies safe, start-ups experimenting with new ideas have been welcomed with open arms by the venture capital industry.

Paul Morgan, Chief Analytics Officer  at KFM Investment Group says recent valuations have become “pretty high” but as these companies do generate revenue, they are still “more of a bargain than social media” start-ups, where valuations have also soared.

The valuation of these cyber security companies may also be rising in anticipation of a deal making boom. Mr. Morgan says he expects most of the new startups to eventually be snapped up by the larger technology companies.

Michael DeCesare, president of McAfee, told the Financial Times last month that the fragmented market would eventually be owned not by the new generation, but by the “big guys” such as Intel, IBM and Dell.

But some among the new generation of cyber security companies have already become large public companies in their own right.