Here's why DataTribe founder Mike Janke says so many cyber companies are getting acquired now

A record number of growing cyber companies are getting acquired in Maryland and across the globe so far this year. Venture-backed cybersecurity companies were involved in 77 merger and acquisition deals throughout the first half of 2021, according to Crunchbase. That's just three shy of the record 80 deals seen in the industry last year.

A local example of this trend can be found in Fulton's cybersecurity startup studio, DataTribe. The studio saw three of its growing companies exit through acquisitions in the space of a few weeks in the second quarter of 2021. Mike Janke, a DataTribe founder and veteran cyber investor, said a rise in high-profile hacks, increased global recognition of the importance of cybersecurity and the fact that cyber proved to be relatively "recession-proof" during the pandemic, are among the factors contributing to the trend.

Janke pointed out the spike in acquisitions coincides with significant growth in investment in the cybersecurity space, signaling unprecedented interest and momentum around cyber innovation. Venture funding to U.S. cybersecurity companies rose to nearly $13 billion in the first half of 2021, according to CB Insights' Q2 State of Venture Report. For comparison, cyber firms raked in a total of $11.2 billion across all four quarters of 2020, and roughly $10 billion throughout all of 2019.

The momentum is fueled, in part, by an apparent necessity for organizations and governments to bolster cyber defenses in the wake of several large-scale and widely reported attacks over the last 10 months. Janke nodded to the Colonial Pipeline ransomware attack that caused gas and fuel shortages up and down the East Coast, and the Kaseya ransomware attack, which affected an estimated 800 to 1,500 businesses. These kinds of attacks have had direct, tangible impacts on consumers, including skyrocketing gas prices and a temporary lack of access to certain businesses as they scrambled to recover their data.

"We're seeing more direct consumer impacts from these recent attacks, and more large corporations realizing if they aren’t on top of cyber, they’re going to have a bad experience in the market," Janke said.

Greater discussion on local, national and international stages around cyber attacks posing enormous threats to financial stability and national security have reinforced investment in cybersecurity as a top priority for companies, he added. For example, the Biden administration has put more funding and focus behind cybersecurity initiatives, including through the appointment of the nation’s first national cyber director who will oversee the development of a national cyber strategy that spans all of government and industry.

And instead of spending many years and many millions of dollars trying to build new defensive and offensive tools, Janke said companies with means are increasingly opting to buy up young cyber companies that are already developing the kinds of technologies they need.

That was certainly the case with the three DataTribe members that were recently bought up.

"This cycle won’t slow down," Janke predicted.

"As long as hackers continue to lob more advanced and damaging attacks at governments and corporations, and as long as young cyber firms remain able to build new tools to fight them off quickly, there will still be "tons of money chasing these [cyber] companies."