4 Cyber Trends We’re Watching — and 5 Moats We Invest Behind

These headline events highlight the stakes of a weak security posture. Across enterprises, key infrastructure, and governments, cybersecurity is no longer a back-office function. It is now the difference between a society that functions and one that falters.

That’s why cybersecurity is one of the fastest-growing, most resilient categories in technology. Already in 2025, we’ve seen over $14 billion raised across cyber companies, surpassing all of 2024’s funding before Labor Day. Unlike many areas of tech, cyber spending isn’t discretionary. Companies must defend themselves against threats, and Boards are writing the checks to make sure they do.

This urgency is creating fertile ground for investors. The biggest platforms can’t keep up with the pace of innovation. Instead, they rely on acquiring the next wave of technologies — a cycle that keeps producing billion-dollar outcomes, most notably Google’s recent announcement of a $32B acquisition of Wiz.

That is why we’re excited to launch Alumni Ventures’ Cybersecurity & Trust Syndicate — giving our community the ability to invest directly in early-stage cyber deals alongside us.

Key Trends We’re Watching

What Moats Do We Look for in Cybersecurity?

When we evaluate cybersecurity startups, one of the first questions we ask is: what’s their moat? In other words, what makes them defensible and difficult to displace when competitors inevitably crowd into the space? Unlike consumer products, where a catchy brand or viral loop can create a moat, cybersecurity is about trust, execution, and deep technical advantage.

1. Proprietary Data and Network Effects

The more signals a company ingests, the smarter and faster its detection can become. Startups that build proprietary datasets, whether from endpoint telemetry, identity logs, or application runtime, are at a major advantage. Think of it as a flywheel: more customers mean more data, more data leads to better detection, better detection attracts more customers. CrowdStrike famously scaled this way, leveraging its Falcon platform to learn from every endpoint across its customer base, making its defenses sharper every day. A modern startup that can replicate that data flywheel in a new domain can build lasting defensibility.

2. Embedded Workflows and Stickiness

There are great products, and there are great products that actually get used in the day-to-day workflows of analysts, engineers, and IT teams. A product that becomes embedded in the SOC (Security Operations Center) or in the continuous integration and continuous deployment pipeline of developers gains tremendous stickiness. “Rip and replace” is notoriously painful in cyber, so once a solution is deeply integrated into alerts, incident response playbooks, or developer workflows, it tends to stay. That’s why we love to see products with API-first design, integrations with major platforms like Okta, Microsoft, or AWS, and proof that customers expand usage over time.

3. Architectural Advantage

Some moats come from building on the right architecture at the right moment. Legacy tools like Splunk became giants in the log management world, but their architectures now buckle under the cost and scale of today’s data. This is creating opportunities for startups to re-architect the SOC with cloud-native pipelines, AI-first analysis, and federated search. Architectural shifts don’t happen often, but when they do, they breed generational companies. Think of Snowflake in data warehousing or Wiz in cloud security. In cyber, we’re seeing that moment right now with the SIEM and SOC stack being rebuilt from scratch.

4. Regulatory and Compliance Advantage

Cybersecurity is a regulatory concern. Startups that can turn compliance headaches (HIPAA in healthcare, PCI in payments, GDPR in Europe) into streamlined workflows create moats by necessity. Once a healthcare system or bank standardizes on your tool to remain compliant, the switching costs skyrocket. This is particularly powerful in industries with high regulatory pressure, like financial services, healthcare, and defense.

5. Human Capital and Trust

Finally, there’s the human element. In cyber, brand and credibility matter immensely. CISOs stake their reputations on the vendors they choose, and many rely on personal networks and trusted operators to make decisions. A startup led by battle-tested operators from places like the NSA, Unit 8200, or Google Cloud often has an immediate credibility advantage. Pair that with early wins from reference customers, and trust becomes its own moat.

Put simply, we’re looking for companies that aren’t just riding a hot theme but are building durable moats. In cybersecurity, those moats are forged from data, stickiness, architecture, compliance, and trust. When we find startups that combine several of these, that’s when we lean in with conviction.

A Unique Opportunity for AV Investors

Cybersecurity is at an inflection point. The threats are multiplying, the dollars are flowing, and the exits are accelerating. Alumni Ventures has already been one of the most active venture firms in cyber, backing some fast risers in the industry.

Now, through our new Cybersecurity & Trust Syndicate, we’re giving our community the chance to go deeper. We invite you to co-invest with us directly in early-stage deals shaping the future of digital trust.

We hosted an introductory webinar to walk through the opportunity and our investment approach. For investors looking to back one of the fastest-growing, most consequential sectors in technology, the moment is now. Click below to watch the webinar on demand.

This communication is from Alumni Ventures, a for-profit venture capital company that is not affiliated with or endorsed by any school. It is not personalized advice, and AV only provides advice to its client funds. This communication is neither an offer to sell, nor a solicitation of an offer to purchase, any security. Such offers are made only pursuant to the formal offering documents for the fund(s) concerned, and describe significant risks and other material information that should be carefully considered before investing. For additional information, please see here. Example portfolio companies are provided for illustrative purposes only and are not necessarily indicative of any AV fund or the outcomes experienced by any investor. Example portfolio companies shown are not available to future investors, except potentially in the case of follow-on investments. Venture capital investing involves substantial risk, including risk of loss of all capital invested. This communication includes forward-looking statements, generally consisting of any statement pertaining to any issue other than historical fact, including without limitation predictions, financial projections, the anticipated results of the execution of any plan or strategy, the expectation or belief of the speaker, or other events or circumstances to exist in the future. Forward-looking statements are not representations of actual fact, depend on certain assumptions that may not be realized, and are not guaranteed to occur. Any forward-looking statements included in this communication speak only as of the date of the communication. AV and its affiliates disclaim any obligation to update, amend, or alter such forward-looking statements, whether due to subsequent events, new information, or otherwise.

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