Recent research, conducted by the independent Venture Business Research (VBR) group in London shows growing investment activities in the security space. "Total investment in private security (IT and homeland) and defense companies has exceeded over $4.7 billion in 2007 YTD ($3.5 billion in 2006 YTD) "
While this is good news for security entrepreneurs, hurdles remain. According to VBR, later stage funding rounds by VCs for security/defense startups are typically 20%+ smaller than for CleanTech and MedTech startups, although they face similar high R&D costs and long sales-cycles to government procurement offices.
The VBR study also confirmed that Europe is still lagging behind the US in terms of financing young startups in the security space: in 2007 so far, 109 security startups from the US received venture funding compared to only 70 across Europe.
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