Investors welcome EU’s efforts to boost European cybersecurity market with €2 billion

33N Ventures, together with the European Cyber Security Organisation (ECSO) and the Basque Cyber Security Centre (BCSC), welcome the publication of a report on the European Cybersecurity Investment Platform, jointly published by the European Commission and the European Investment Bank (EIB) on the 20th October 2022. The report marks an important strategic step towards creating a vigorous and competitive investment landscape in Europe amidst the increased global competition in the technology sector.

According to the market assessment presented in the report, the European cybersecurity market suffers from almost €2 billion investment gap, which forces European cybersecurity start-ups and scale-ups to leave the European market to fulfil their growth ambition. In recent years, ECSO has been calling for more investments in Europe’s cybersecurity market.  

“ECSO and its Members are proud to have advanced the work on addressing the cybersecurity investment gap in Europe and proposing the concrete tools to overcome it. This work will help shape the future of the EU’s cybersecurity posture for years to come. We welcome this report, and we are confident that it will lead to important decisions reinforcing EU’s capacity to develop a robust cybersecurity market” – said Axel Deininger, ECSO Chairperson & CEO of secunet Security Networks.

“The report represents an opportunity to increase Europe’s competitiveness on the global cybersecurity market which we should embrace. We support the report’s market assessment and its key message that now is the time for the creation of the European Cybersecurity Investment Platform (ECIP). We have a potential to create a useful tool to address the financing needs of European cybersecurity companies and support their ambition to scale up in Europe. The €2 billion investment is far from the sector’s needs, but it is a remarkable first step. We now need to have a close collaboration between the public and private sectors to translate this opportunity into reality” – stated Javier Diéguez, Director of the BCSC and Member of the ECSO Board of Directors.

While endorsing the analysis of the European cybersecurity market and its investment gaps presented in the report, ECSO and BCSC, which represents one of the most vibrant cybersecurity ecosystems in Europe, call for a careful assessment of the future structure and functioning of the ECIP, as it will be paramount to its market success.

In its consultations with the EIB Group and the European Commission, ECSO has warned against the risk of creating a slow and unattractive financial mechanism unable to compete with investment offers from overseas, especially if it will contain a lengthy investment approval procedure, rigid market restrictions on investee companies or unintended competition among the investment funds in Europe. Having a solid experience in implementing cybersecurity investment activities and gathering European investors specialising in cybersecurity, ECSO offers its assistance to the EIB Group and the European Commission with building the effectively functioning ECIP.

“33N Ventures is committed to continue collaborating with our peers at ECSO to support the Commission and the EIB Group in identifying the relevant levers for reinforcing the European cybersecurity investment market. We’re particularly supportive of ECSO’s call for creating a market-oriented investment platform with a fund of funds structure, which would strengthen European specialised VCs investment capacity and ensure their competitiveness to dully back European startups that aim to become global market leaders” – added Carlos Moreira da Silva, Managing Partner at 33N Ventures.

ECSO’s call for creating a market-oriented investment platform has been endorsed and supported by the leading European cybersecurity organisations, including 33N Ventures, Basque CyberSecurity Centre, Cyber Wales, eCAPITAL, LSEC - Leaders in Security, secunet Security Networks, TIIN Capital|Dutch Security Tech Fund, Tikehau Ace Capital and Consorzio CINI, which have been working together to advance cybersecurity investments and market development in Europe.

Recognising the threats imposed by the cybersecurity market fragmentation and the investment gap in EU’s cybersecurity market, ECSO proposed the creation of the European Cybersecurity Investment Platform (ECIP) worth at least €1 billion EUR to address the urgent market needs. In 2020, the Letter of Intent to the European Commission detailing the proposal was endorsed by 49 public and private stakeholders representing the European cybersecurity market. Drawing on ECSO’s proposal, the feasibility study to assess the market and the set-up of the ECIP was launched by the EIB’s European Investment Advisory Hub in October 2021, upon official request of BCSC.