Allegis Capital Creates $100M+ Fund To Take On Cybersecurity

Allegis Capital is $100 million closer to a new fund built to invest in cybersecurity. According to Founder and Managing Director Bob Ackerman, the fund's target is $150 million, but the firm announced the fund's close at $100 million because "we wanted to get going."

“All our deal flow in cyber comes from entrepreneurs, and we want to make sure that every entrepreneur doing something out there knows what we’re doing,”Ackerman noted.

This is not Allegis' first rodeo in cybersecurity. The firm made a big bet on IronPort Systems, which went on to sell to CISCO in 2007 for $830 million.

But unlike these days when everyone and their mother is thinking about cybersecurity, just a few short years ago, it was considered more of a niche.

"Everybody acknowledges there is a problem, and we don’t have a lot of explaining to do,” Mr. Ackerman said. "[Cybersecurity] stands in front of the information technology infrastructure that underlies the entire global economy.”

During the Year of the Breach in 2014, at least four Fortune 500 companies went public with information that they had been compromised by criminals. This turned security into big business, and U. S. venture capitalists invested $1.77 billion into privately held cybersecurity companies. That edges out the previous record holder: $1.62 billion raised in 2000 during the dot-com boom. Globally, cybersecurity also had a record making year, taking in $1.9 billion in venture funding.

The new fund, Allegis VI LP, will invest in two types of cybersecurity startups. The first type is dedicated to securing legacy infrastructure that was designed in a pre-Internet world. The second type of firm to draw investment will be new platforms that include security as part of the original design.



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