Deep Instinct, BetterCloud, Guardicore, and Swimlane are among the 50 cybersecurity startups that have the potential to become unicorns with a market valuation over $1 billion, according to GlobalData. 

“As we are entering the Code War era, where every digital device, no matter how small, can be [weaponized] and cyberattacks are proliferating globally, investors are investing heavily to back cybersecurity startups,” Apoorva Bajaj, practice head of financial markets at GlobalData, said in the statement.

GlobalData listed US-based endpoint cybersecurity solution provider Deep Instinct as one of the future unicorns. The vendor applies deep learning to cybersecurity, and it has raised $259.1 million in funding with BlackRock and Chrysalis Investments leading the series D round, according to Crunchbase.

BetterCloud is another US-based startup on the list. The company offers a software-as-a-service (SaaS) management platform enabling IT professionals to discover, manage, and secure SaaS applications. It recently launched a new centralized platform: BetterCloud Discover.

For cloud security startups, GlobalData highlighted Guardicore from Israel. It provides microsegmentation and workload-protection solutions for data centers and public clouds and raised $106 million in five funding rounds, according to Crunchbase.

GlobalData predicted US-based security automation provider Swimlane will become a unicorn in the unified threat management (UTM) field. The company acquired incident response platform Syncurity last year. It offers an orchestration platform to assist organizations in handling all security operation (SecOps) requirements including automating the remediation of threats. 

Other security vendors on the list include WhiteSource, GreatHorn, Bitglass, Cynet, SpyCloud, Siemplify, and Dragos.

The 50 future cybersecurity unicorns list is based on GlobalData’s Startup Scorecard ranking of 10,000 top global startups and predicted by its machine learning model. While these 50 made cut, 126 startups were on the shortlist, according to GlobalData. 

There are seven subgroups in the list: application security, cloud security, data security, endpoint security, identity management, UTM, and network security. 

"Startups from application security and network security are the leaders in terms of count and investments,” Bajaj wrote to SDxCentral in an email. He also sees identity management products increasing momentum, given the fact that most people are working remotely because of the pandemic. Because of this, related identity attacks are rising.

The cybersecurity industry reported more than $8.1 billion investment in 209 deals globally, with a spike in startups investments from venture capital (VC) during the second quarter of this year, according to GlobalData’s latest report. It also shows that startups such as Transmit Security, Trulioo, and Forter raised funds in the range of $300 million to $550 million.

“Increase in VC deals coupled with substantial growth in patents granted, along with positive news sentiments and growing mentions of cybersecurity in public company filings indicate that this technology is of considerable interest to both VCs and corporates,” Bajaj noted. 

For the first half of this year, the cybersecurity market recorded the highest-valued initial public offering (SentinelOne) and the largest-ever funding round (Lacework). Cybersecurity unicorn SentinelOne made a nearly $11 billion market debut on June 30, beating out CrowdStrike’s record-setting $6.7 billion public debut in 2019. And Lacework closed a $525 million Series D funding round in January that pushed its valuation “well over $1 billion,” according to then-CEO Dan Hubbard.

Also this year, secure access services edge (SASE) unicorn Netskope closed a $300 million funding round in early July, and its valuation skyrocketed to $7.5 billion.

“The COVID-19 pandemic is providing tailwinds to this industry, as companies are embracing remote work models,” Bajaj said. “With cloud-based backup becoming the order of a choice to save applications and data, a range of new online threats is likely to emerge, which will make investment in cybersecurity a necessity.”