This Silicon Valley venture fund keeps betting millions on D.C.’s cyber community

August 23, 2016

Bessemer Venture Partners is one of California’s more successful technology investors, an early backer in the likes of Yelp, LinkedIn and Skype. Lately, the venture firm has taken a particular interest in the Washington area’s cybersecurity scene. Its fund owns stakes in at least 40 cybersecurity companies, and recently added three local companies to its portfolio.

All three — PhishMe, Distil Networks and Virtru — are niche cybersecurity outfits that draw heavily on the region’s three-letter agencies for top talent.

“There are people around [the District] who invented the anatomy of a cyberattack. The only place to find people with operational cyber expertise is within driving distance of [the National Security Agency’s campus at] Fort Meade.”

Big ticket investors tend to see cybersecurity as a chameleonic market prone to quick exits and constant consolidation.

In cybersecurity, “there’s a whole other industry of people who are constantly rendering your product obsolete,” Cowan said. That means older and bigger cybersecurity companies “have to always be buying up start-ups to stay advanced.”

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