A $1.1 billion cybersecurity and AI fund was recently formed by Evolution Equity Partners, the third of its kind in the company's history. The Evolution Technology Fund III attracted substantial subscriptions from a diverse group of new and returning investors, including insurance companies, foundations, endowments, sovereign wealth funds, and family offices. According to Richard Seewald, managing partner and co-founder of Evolution, investments will range from $20 million to $150 million, targeting cybersecurity firms and startups employing AI and machine learning to create market-leading platforms.
The cybersecurity sector is beginning to revive, despite a 40% drop in sector investments from the prior year. According to data from NightDragon and the recruitment agency Pinpoint, a considerable proportion of chief information security officers have reported raising their budgets for 2024. Additionally, despite a decline in overall expenditure, deal activity has climbed year over year in the first quarter of 2024.
Since it began making investments more than a year ago, the Evolution Technology Fund III has helped 15 well-known cybersecurity companies. The fund intends to increase the number of companies in its portfolio to up to thirty. It will allocate seventy-five percent of its resources to early-stage initiatives in North America, Europe, and Israel, and fifteen percent to later-stage startups.
Seewald also highlighted how Evolution's investing procedures adhere to environmental, social, and governance (ESG) standards. By fostering diverse boards and leadership, the business works with the companies in its portfolio to improve decision-making and accountability.
Evolution Equity Partners was established in 2008 by Seewald and Dennis Smith in New York. J.R. Smith and Karel Obluk, two former executives of AVG, later joined the firm. To date, Evolution Equity Partners has supported 60 firms and manages about $2 billion in assets. Among its noteworthy investments are Talon Cyber Security, which is in negotiations to merge or acquire with Palo Alto Networks, and Arctic Wolf, which is preparing for an initial public offering.
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