Blockchain Leads in Returns Among Cybersecurity Startup Investments, Swiss Study Reveals
Summary:
Swiss researchers funded by the Cyber-Defence Campus of Switzerland have found blockchain to be the leading investment choice among cybersecurity startups. Their research, based on Crunchbase data, indicated that blockchain's annual return rate significantly surpasses sectors like AI, machine learning, and cloud. They attributed this success to the growing investor interest in cryptocurrencies. The study also highlighted the speed at which blockchain startups progress from initial funding to IPO, outpacing other tech sectors.
Swiss academics, funded by the Cyber-Defence Campus of Switzerland, have disclosed empirical research which points to blockchain as the optimal choice among investments in cybersecurity startups. The investigation, which is titled "'Measuring the performance of investments in information security startups: An empirical analysis by cybersecurity sectors using Crunchbase data," categorizes and places 19 cybersecurity startup sectors, from artificial intelligence to spam filtering. According to the research team, the blockchain sector's expected annual arithmetic and log returns were found to be standing at the top with 177.27% and 105.42% respectively, which resonates with the performance of cryptocurrencies over the same period. This signifies that blockchain security startups brought higher yields than AI, machine learning, cloud, and other sectors. The AI sector, however, landed second, with expected annual arithmetic returns of 67.25%. It's important to note that these statistics do not represent the wider AI and tech industries, which encompass non-security hardware and software goods and services, such as Nvidia's GPUs and OpenAI's GPT technology. When focusing on the investment in the security sector, blockchain not only does lead in terms of returns but also in speed. On average, blockchain startups moved from their initial funding stage to IPO in just under three and a half years, while startups from other sectors required between four to seven years, with E-signature startups requiring the most time at 10 years. The investigation relied on data from Crunchbase, which provided comprehensive data on funding stages but fell behind on IPO entries. The missing data was accommodated for by resorting to a machine learning method. The research group also noticed that the performance of blockchain security startups "is likely to be driven by investors’ interest in cryptocurrencies." Therefore, it is worth noting that the data used in the study spans from 2010 to 2022, excluding much of the post-COVID activity, which other investigations have indicated to be transformative for both blockchain and cryptos.
Published At
2/22/2024 10:17:20 PM
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