The pandemic has created a plethora of new opportunities for hackers. With most of the workforce still working from home, vulnerabilities in cloud and data security have been revealed, and they are not expected to go away anytime soon. That’s good news for M&A. Just today NortonLifeLock announced the acquisition of Avast for $8.6 billion.

“Global cyber threats are growing, yet cyber safety penetration remains very low,” says Avast CEO Ondřej Vlček. “Together with NortonLifeLock, we will be able to accelerate our shared vision of providing holistic cyber protection for consumers around the globe.”

When the world was hit by the pandemic in 2020 and employees moved to working from home, businesses had to scramble to set up remote IT networks. This created ample opportunities for hackers and cybercrime, and fraud became more fast-paced and sophisticated.

A survey from technology research and advisory company Technavio projected that the cybersecurity market will grow by $189.7 billion, progressing at a compound annual growth rate of close to 15 percent during 2021-2025.

So what does that mean for deals? Private equity firms and their portfolio companies have carried out more and more cybersecurity acquisitions each year for roughly the past decade. About $40 billion in private capital has flowed into cybersecurity companies since 2018, and there are about 2,000-plus cybersecurity companies worldwide. One big example is Thoma Bravo’s recently announced $12.3 billion acquisition of e-mail security standard-bearer Proofpoint.

Hackers are constantly advancing and finding new ways to attack. Digital transformation and work from home has only accelerated this problem, and businesses have a long way to go to catch up. What kinds of cybersecurity firms are you investing in? I would love to hear about it at: [email protected].

– Demitri Diakantonis