Cybersecurity- and privacy-focused startups raised a total of $6.8 billion in the third quarter of 2026, according to Crunchbase data. That is up about 50% from the prior quarter and tied for the highest quarterly tally in years. The increase came from larger rounds rather than more of them, as round counts declined sequentially across all stages.
AI startups accounted for the overwhelming majority of cybersecurity funding, with a particular focus on identity security. At least 18 companies at the intersection of artificial intelligence and cybersecurity closed rounds of $100 million or more during the quarter. The largest was enterprise identity security provider Keyfactor, which picked up $1 billion in a July growth round led by Summit Partners. Founded in 2001, the Ohio company has attracted most of its venture funding in the past 10 years, and its pivot to AI is more recent.
Dallas-based Island tied for second place with a $400 million September Series F led by Evolution Equity Partners, which also set a post-money valuation of $6.4 billion. Cyera, which operates an enterprise data security platform focused on AI agents, announced a fresh $400 million Goldman Sachs Growth Equity-led investment in September, just three months after raising $600 million. That round set a $12 billion valuation for the New York startup.
M&A activity was also strong even as the IPO market was sluggish. Visa led the acquisitions with its $2.4 billion purchase of anti-fraud technology provider Bio Catch in August, part of a broader effort to strengthen its fraud detection for the AI age. Cyera acquired Oasis Security, an access management platform for AI agents, in a deal reportedly valued around $1 billion. Aura, which offers digital security services to consumers, was the lone sizable venture-backed market debut after completing its acquisition of Australian public company Qoria in July.
Source: Crunchbase News · Summarized by HeadlinesBriefing