Analysis
Cybersecurity and privacy-focused startups pulled in $6.8 billion in venture funding during the third quarter of 2026, Crunchbase News reported, a roughly 50% jump from the prior quarter and a total tied for the highest quarterly haul in years.
The gains came entirely from bigger checks, not more of them: deal counts fell sequentially at every funding stage even as the dollar total climbed, with at least 18 AI-and-cybersecurity companies closing rounds of $100 million or more. AI-focused identity-security startups drove much of that concentration.
The largest deals of the quarter:
“The largest deals of the quarter: - Keyfactor — $1B growth round (July), led by Summit Partners (Crunchbase News): the single largest recipient of the quarter.”
- Keyfactor — $1B growth round (July), led by Summit Partners (Crunchbase News): the single largest recipient of the quarter.
- Island — $400M Series F (September), led by Evolution Equity Partners, at a $6.4B post-money valuation (Crunchbase News).
- Cyera — $400M round (September), led by Goldman Sachs Growth Equity, at a $12B valuation, three months after a prior $600M raise (Crunchbase News).
- Visa — acquired BioCatch for $2.4B (August), the quarter's largest cybersecurity M&A exit (Crunchbase News).
- Cyera — also acquired Oasis Security, in a deal reportedly worth around $1B (Crunchbase News).
Pulse covered the AI-security funding surge in late September when Island and Cyera both raised in the same week; this quarter's total shows that pace held up rather than cooling.
But concentration cuts both ways: with round counts falling at every stage, fewer companies are capturing most of the capital, and the exit activity -- a $2.4 billion Visa acquisition and Cyera's own roll-up of a competitor -- suggests consolidation is accelerating as much as fresh company formation. Aura's completed merger with Australia's Qoria was the quarter's only sizable venture-backed public debut, a thin signal for how exit-starved the broader security sector remains outside of M&A.
