President Obama Delivers Remarks On Cyber Security
President Barack Obama delivers remarks at the National Cybersecurity and Communications Integration Center (NCCIC) on January 13, 2015 in Arlington, Virginia. Photograph by Getty Images

Prediction: The Cybersecurity Startup Boom Will End in 2016

Dec 04, 2015

The staff of Fortune recently assembled its predictions for 2016. Here’s one of our forecasts.

It’s hard to find a hotter startup segment than cybersecurity. Panic, paranoia and fear of missing out on the next lucrative opportunity have led investors to rain down capital on any firm endeavoring to keep hackers at bay. The sector raised about $2.5 billion in 2014, and it is on track to perform similarly this year. There will be a reckoning, though: Too many upstarts are building too many “me too” tools. Expect well-funded top dogs—companies like Bit9 + Carbon Black, Tanium, CrowdStrike—to weather the storm while more traditional big tech names and security stalwarts snap up smaller firms through “tuck in” acquisitions, cleaning up the field as the pipsqueaks wither away.

This article is part of the 2016 Fortune Crystal Ball, a package of 33 predictions about business, politics and the economy by the writers and editors of Fortune. To see the entire package, click here.

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