Data Security Startup Cyera Buys Trail Security In Tepid M&A Market

Chris Metinko

It has been sluggish on the M&A front in most sectors all year — and cybersecurity is no different.

However, on Thursday New York-based data security startup Cyera bought data loss prevention firm Trail Security for $162 million. Trail had been backed with more than $35 million of funding from the likes of Lightspeed Venture Partners, CRV and Cyberstarts.

“The acquisition of Trail is a pivotal step in Cyera’s journey to reshape the future of data security,” said Yotam Segev, CEO and co-founder of Cyera, in a release.

Cyera offers a platform that helps security teams at companies understand what data they have and how it’s used, as well as how to secure it — all of which has become more important with companies relying on data to drive AI initiatives. The startup also uses AI in its platform to assess risks a company’s data represents regarding security, privacy and regulatory compliance.

In April, Cyera raised a $300 million Series C led by Coatue at a $1.4 billion valuation. The round nearly tripled the startup’s previous valuation from its $100 million Series B in June 2023.

The company reportedly is looking at at least $200 million at a pre-money valuation of around $3 billion.

Founded in 2021, Cyera has raised nearly $465 million to date, per Crunchbase.

M&A uptick

So far this year, there have been 67 M&A deals involving VC-backed startups in cybersecurity, per Crunchbase data.

That is already more than the 58 for all of last year. Despite the generally slow M&A market, this year could even beat 2022’s 84 deals involving VC-back cyber startups.

The largest M&A cyber deal this year involving a VC-backed firm was credit card giant Mastercard agreeing to buy threat intelligence company Recorded Future for $2.65 billion.