INVESTMENTS in cybersecurity startups surged in 2025, driven by a rush to AI-native security solutions and a wave of mergers and acquisitions, according to Momentum Cyber. Venture-capital firms invested $119 billion in cybersecurity, with 400 M&A transactions accounting for the majority of funding and another 820 financing deals totalling nearly $21 billion, and the total value of M&A, financing and IPO activity nearly tripled the previous year.
AI security product firms led deal activity with 144 M&A deals, while risk and compliance startups were close behind with 137 deals, reflecting a market highly focused on AI-native capabilities. Strategic buyers accounted for around 92% of disclosed M&A capital, with Wiz, CyberArk, and other high-profile acquisitions cited as examples; Momentum Cyber notes total disclosed deal value topped $96 billion across 400 transactions.
The narrative emphasises AI's impact on both the economics and the operational dynamics of cybersecurity, with experts predicting continued momentum into 2026 as firms seek to govern and secure AI-enabled enterprises.