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Cybersecurity Venture Capital Surges In Q2 2025, Supported By AI-Driven Demand : Research

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The cybersecurity sector has experienced a resurgence in venture capital activity in Q2 2025, marking its strongest quarter since mid-2022. According to the latest Cybersecurity VC Trends report from PitchBook, the industry saw $4 billion invested across 163 transactions, reflecting a significant uptick in deal value and signaling renewed investor confidence in the space.

This surge is driven by demand for advanced data and network security solutions, propelled by the integration of artificial intelligence across industries.

The report highlights key trends, including a focus on late-stage investments, platform consolidation, and the rising prominence of AI-aligned cybersecurity solutions.

The $4 billion in deal value represents a high-water mark for cybersecurity VC activity in recent years, with late-stage (Series C and D) and venture-growth rounds accounting for the lion’s share of capital.

This concentration reflects a broader trend of investors gravitating toward mature platforms with proven business models, as companies prioritize scalability and competitive positioning in an increasingly crowded market.

The report notes that this focus on later-stage funding is expected to deepen, as cybersecurity firms pursue consolidation strategies to bolster their market presence.

Segment performance in Q2 2025 was notably divergent, with data security and network security leading the charge.

Data security saw an extraordinary 420% quarter-over-quarter increase in deal value, driven by heightened demand for solutions addressing AI-driven vulnerabilities.

Network security followed closely, with a 250% QoQ rise, fueled by platform-building mergers and acquisitions (M&A).

Application security also saw significant growth, nearly doubling in deal value, as businesses sought to mitigate risks earlier in the software development lifecycle.

These trends underscore the critical role cybersecurity plays in safeguarding the digital infrastructure underpinning AI and other emerging technologies.

The integration of AI into business operations has introduced both opportunities and challenges for cybersecurity.

As AI-driven vulnerabilities proliferate, companies are racing to deploy solutions that can keep pace with sophisticated threats.

The PitchBook report points to AI-aligned platforms as a key driver of VC activity, with investors backing firms that integrate AI to enhance threat detection, response, and prevention.

This focus is evident in high-profile deals, such as those involving identity governance and synthetic data firms, which are increasingly central to comprehensive cybersecurity strategies.

Consolidation emerged as a defining theme in Q2 2025, with larger firms acquiring specialized capabilities to build integrated platforms.

Notable examples include CyberArk’s $165 million acquisition of Zilla Security, which strengthens its identity governance offerings, and NVIDIA’s $320 million purchase of Gretel, a synthetic data firm, highlighting the growing importance of AI-aligned cybersecurity solutions.

These deals reflect a strategic shift toward platforms that combine multiple security functions, enabling companies to address complex threats more effectively.

Despite the strong performance in Q2, the cybersecurity sector faces challenges.

Deal volume dipped slightly compared to previous quarters, suggesting a selective approach by investors who are prioritizing quality over quantity.

The report also notes a subdued exit environment, with only $1.5 billion in exit value during the first half of 2025—the weakest pace since 2016.

However, notable M&A deals, such as OfferFit’s $325 million acquisition by Braze, indicate that strategic acquisitions remain a viable path for growth.

Looking ahead, the cybersecurity VC landscape appears poised for continued growth, driven by the relentless pace of digital transformation and the increasing sophistication of cyber threats.

Investors are likely to continue focusing on late-stage companies with strong fundamentals, while early-stage startups leveraging AI and other innovative technologies may attract renewed interest.

The PitchBook report emphasizes the importance of platform consolidation and scalability, as companies seek to differentiate themselves in a competitive market.

The Q2 2025 Cybersecurity VC Trends report paints a picture of a sector at a pivotal moment, with AI-driven demand and strategic consolidation shaping the investment landscape.

With $4 billion in deal value and a focus on mature, scalable platforms, cybersecurity continues to be a critical area of focus for venture capital.

As businesses navigate an increasingly complex threat environment, the investments highlighted in the report could potentially play a crucial role in securing an increasingly digital environment.





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From pilot to profitability: How to approach enterprise AI adoption

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From central authority to shared ownership

In conversations with other IT leaders, I’ve noticed a common pattern in how AI programs evolve. Most began with a centralized team — a logical first step to establish standards, consistency and a safe space for early experiments. But over time, it became clear that no central group could keep pace with every business request or understand each domain deeply enough to deliver the best solutions.

Many organizations have since shifted toward a hub-and-spoke model. The hub — often an AI center of excellence — takes responsibility for governance, education, best practices and the technically complex use cases. The spokes, led by product or functional teams, experiment with AI features embedded in the tools they use every day. Because they’re closer to the business, these teams can test, iterate and deliver solutions at speed.

When I look across industries, the majority of AI innovation is now happening at the edge, not the center. That’s largely because so much intelligence is already embedded into enterprise software. A CRM platform, for instance, might now offer AI-based lead scoring or predictive churn models — capabilities a team can enable and deploy with little to no involvement from the center of excellence.



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Larry Ellison Institute gives Oxford £118 million for AI vaccine research

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The Ellison Institute of Technology (EIT) is funding an Oxford vaccine research project that will tackle pathogenic diseases using AI.

Ellison, who recently overtook Elon Musk as the world’s richest man, is giving Oxford £118 million for the programme, which will be led by the Oxford Vaccine Group. 

Professor Sir Andrew Pollard, director of the group that led COVID-19 trials, described the programme as a “new frontier in vaccine science”. Scientists will use “human challenge models”, where volunteers are safely exposed to bacteria under controlled conditions and AI tools to identify immune responses that predict protection.

Oxford’s Vice-Chancellor, Irene Tracey, described the project as a “major step forward” in the strategic alliance with the Ellison Institute. She explained that her vision is to draw “more talent and capacity to the Oxford ecosystem to turn scientific challenges into real solutions for the world”.

EIT is designed to host 7,000 scientists, including an oncology clinic, auditorium, laboratories, library, classrooms, and park space. Oxford University, by comparison, has 5,000 research staff.

The Institute has already faced leadership turbulence, with the President, John Bell, resigning days before the vaccine project was announced. Bell was pictured signing the contracts with Irene Tracey when the “strategic alliance” was first announced in December 2024. Bell publicly endorsed Lord Hague in the Chancellor election last year.

The Wall Street Journal reported that Bell clashed with Ellison over operations and staffing, and that tensions flared over the mix of people being brought into the Institute, as well as Ellison’s decisions to fire senior staff without involving him.

Bell, who was Regius Professor of Medicine at Oxford until March last year, also serves as chair of Our Future Health, a government-funded project to genetically test millions of patients. He holds over £700,000 of shares in Roche, a pharmaceutical company where he sat on the board for 20 years, which has drawn criticism from genomics-monitoring groups for the “conflict of interest”.

Despite these controversies surrounding Bell’s various roles, a University spokesperson told Cherwell: “We recognise his pivotal contribution in helping to establish the Institute and in attracting outstanding researchers to its mission.” 

Bell belonged to the Institute’s Faculty of Fellows alongside former Prime Minister, Tony Blair. Tony Blair’s own Institute for Global Change (TBI) is bankrolled by Ellison. As well as sharing their source of funding, the Ellison-funded institutes work in collaboration on an “AI for Governments” project.

Larry Ellison amassed his billions as boss of tech-giant Oracle, where he has made headlines for suggesting that Oracle would pioneer “AI mass surveillance”, as well as for his friendship with Israeli Prime Minister Benjamin Netanyahu, whom he offered a job at Oracle. Ellison donated to the Israeli military through Friends of the Israel Defense Forces, giving the organisation $16.6 million in 2017.

Ellison also reportedly has a close relationship with Trump, attending meetings in the Oval Office. Trump has questioned the effectiveness of COVID-19 vaccines, which were pioneered by the same Oxford Vaccine Group that are partnering with Ellison’s institute on this project. 

Responding to Ellison’s ties to vaccine-sceptic politicians, as well as questions over the ownership of intellectual property (IP) stemming from the strategic alliance, the University spokesperson told Cherwell that it ensures any external partnerships “align with the University’s public mission, including by realising impact from our academic research”. 

Further details on the ownership or management of intellectual property arising from the programme have not been made public.



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Drone Cybersecurity Research Report 2025-2034: AI-Powered

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Dublin, Sept. 12, 2025 (GLOBE NEWSWIRE) — The “Drone Cybersecurity Market – A Global and Regional Analysis: Focus on Components, Drone Type, Application, and Regional Analysis – Analysis and Forecast, 2025-2034” report has been added to ResearchAndMarkets.com’s offering.

The drone cybersecurity market forms a critical segment of the broader UAV and cybersecurity ecosystem. Advances in sensor technology, encrypted communication, AI-driven analytics, and blockchain integration are reshaping how drones mitigate cyber risks. Drone cybersecurity solutions encompass software, hardware, and managed services that collectively safeguard UAV operations against GPS spoofing, signal jamming, data breaches, and unauthorized control.

The market benefits from substantial investments in research and development aimed at enhancing threat detection accuracy, minimizing latency, and securing over-the-air firmware updates. Regulatory frameworks, particularly in the U.S., Europe, and Asia-Pacific regions, are driving increased adoption of cybersecurity measures, compelling manufacturers and operators to comply with stringent standards. This regulatory emphasis fuels innovation in drone cybersecurity market offerings, including autonomous defense features and comprehensive incident response services.

Global Drone Cybersecurity Market Lifecycle Stage

Currently, the drone cybersecurity market is in a high-growth phase, propelled by accelerating UAV deployments in sectors such as agriculture, defense, infrastructure inspection, and logistics. Key technologies have matured to advanced readiness levels, supporting broad implementation. North America commands a significant market share due to substantial defense spending and proactive regulatory policies, while the Asia-Pacific region demonstrates rapid adoption driven by commercial applications and government initiatives.

Collaborative ventures between cybersecurity firms, drone manufacturers, and government agencies are essential to delivering integrated security solutions. Market dynamics are influenced by evolving cyber threat landscapes, emerging drone use cases, and advancements in AI and machine learning. The drone cybersecurity market is forecast to maintain strong momentum over the next decade, supported by continuous technological innovation and increased prioritization of UAV security in global drone operations.

Drone Cybersecurity Market Key Players and Competition Synopsis

The drone cybersecurity market exhibits a dynamic and competitive environment driven by leading technology firms and innovative cybersecurity solution providers specializing in unmanned aerial vehicle (UAV) security. Major global players such as Airbus Defence and Space, DroneShield, and Raytheon Technologies are pivotal in advancing drone cybersecurity technologies. These companies focus on developing sophisticated threat detection systems, secure communication protocols, anti-jamming hardware, and AI-powered anomaly detection tools tailored to protect drones from evolving cyber threats.

Alongside established leaders, emerging startups contribute innovative solutions addressing niche vulnerabilities and enabling real-time response capabilities. Competition within the drone cybersecurity market is intensified by strategic partnerships, continuous innovation, regulatory compliance demands, and increasing drone adoption across defense, commercial, and governmental sectors. As the drone cybersecurity market expands, players prioritize scalable, interoperable, and cost-effective security solutions that meet diverse operational requirements globally.

Demand Drivers and Limitations

The following are the demand drivers for the drone cybersecurity market:

  • Growing drone use in critical applications
  • Increasing sophistication of cyberattacks on UAVs
  • Strict regulatory cybersecurity requirements

The drone cybersecurity market is expected to face some limitations as well due to the following challenges:

  • High implementation costs
  • Technology outpacing security solutions

Some prominent names established in the drone cybersecurity market are:

  • Airbus Defence and Space
  • Palo Alto Networks
  • Airspace Systems
  • Boeing Defense, Space & Security
  • BAE Systems plc
  • DroneShield
  • DroneSec
  • Fortem Technologies
  • Raytheon Technologies
  • Israel Aerospace Industries Ltd. (IAI)
  • General Dynamics Corporation

Key Attributes:

Report Attribute Details
No. of Pages 140
Forecast Period 2025 – 2034
Estimated Market Value (USD) in 2025 $2.91 Billion
Forecasted Market Value (USD) by 2034 $13.19 Billion
Compound Annual Growth Rate 18.2%
Regions Covered Global

Key Topics Covered:

1. Markets: Industry Outlook
1.1 Trends: Current and Future Impact Assessment
1.2 Market Dynamics Overview
1.2.1 Market Drivers
1.2.2 Market Restraints
1.2.3 Market Opportunities
1.3 Impact of Regulatory and Environmental Policies
1.4 Patent Analysis
1.4.1 By Year
1.4.2 By Region
1.5 Technology Trends and Innovations
1.6 Cyber Threats and Risk Assessment
1.7 Investment Landscape and R&D Trends
1.8 Value Chain Analysis
1.9 Industry Attractiveness

2. Global Drone Cybersecurity Market (by Components)
2.1 Software
2.2 Hardware
2.3 Services

3. Global Drone Cybersecurity Market (by Drone Type)
3.1 Fixed Wing
3.2 Rotary Wing
3.3 Hybrid

4. Global Drone Cybersecurity Market (by Application)
4.1 Manufacturing
4.2 Military and Defense
4.3 Agriculture
4.4 Logistics and Transportation
4.5 Surveillance and Monitoring
4.6 Others

5. Global Drone Cybersecurity Market (by Region)
5.1 Global Drone Cybersecurity Market (by Region)
5.2 North America
5.2.1 Regional Overview
5.2.2 Driving Factors for Market Growth
5.2.3 Factors Challenging the Market
5.2.4 Key Companies
5.2.5 Components
5.2.6 Drone Type
5.2.7 Application
5.2.8 North America (by Country)
5.2.8.1 U.S.
5.2.8.1.1 Market by Components
5.2.8.1.2 Market by Drone Type
5.2.8.1.3 Market by Application
5.2.8.2 Canada
5.2.8.2.1 Market by Components
5.2.8.2.2 Market by Drone Type
5.2.8.2.3 Market by Application
5.2.8.3 Mexico
5.2.8.3.1 Market by Components
5.2.8.3.2 Market by Drone Type
5.2.8.3.3 Market by Application
5.3 Europe
5.4 Asia-Pacific
5.5 Rest-of-the-World

6. Competitive Benchmarking & Company Profiles
6.1 Next Frontiers
6.2 Geographic Assessment
6.3 Company Profiles
6.3.1 Overview
6.3.2 Top Products/Product Portfolio
6.3.3 Top Competitors
6.3.4 Target Customers
6.3.5 Key Personnel
6.3.6 Analyst View
6.3.7 Market Share

For more information about this report visit https://www.researchandmarkets.com/r/mhm1qg

About ResearchAndMarkets.com
ResearchAndMarkets.com is the world’s leading source for international market research reports and market data. We provide you with the latest data on international and regional markets, key industries, the top companies, new products and the latest trends.


            



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