Cybersecurity is one of the hottest sectors these days in the tech industry. The increase in the amount of data gathered and kept online and the increase in cloud services and global interactions have created a higher need for top-notch security. Furthermore, the frequent security breaches that have happened lately drive enterprises to look for more advanced IT security than they currently have, and that has impacted the cyber security market greatly. As shown in chart 1 below, only one out of five leading cyber security stocks yielded less than a 20% return year-to-date [Check Point (NASDAQ:CHKP)] while the rest yielded phenomenal returns even after experiencing strong correction in the last few months.

The cyber security trend did not ignore the private equity market that attracts many investors to invest in early stage companies to benefit from an even higher return than showed above. As shown in chart 2 below, this year alone, cybersecurity firms raised $1.2B and more than $4.6B in the last couple of years when the total amount of financing grew at 40% year-over-year.

The last cybersecurity company to receive significant funding is Tanium, a California-based startup that secured $120M from Andreessen Horowitz, TPG, and Institutional Venture Partners last week. The recent funding is taking place only six months after the company raised $52M from Andreessen Horowitz in March earlier this year.

Tanium develops a different type of cybersecurity solution that enables IT departments in major enterprises to collect real-time data on each IT asset in seconds. Tanium allows the IT departments to keep track of all its assets in real-time, whether they are laptops, desktops, servers, virtual machines or even ATMs, and monitor whether one of these end points was compromised or hacked. In the case that a computer was hacked, Tanium can track down and identify the source of the attack, the geographic location of the hackers, and many more details than what they were able to gather before. According to the company’s co-founder and CTO,Orion Hindawi, “certain attacks change their form every few minutes, so using 3-day old data won’t help the company to track the attack and restore the security breach.”