State of the Nation at 33N Connect Day

Insights from a cyber unicorn, cyber M&A trends and future ahead

Pedro @ 33N

Gonçalo Borges

, and

Margarida Correia

Jun 04, 2025

33N hosted its first Connect Day last week, bringing together repeat founders, execs and investors to reflect on the trends in cyber and infra software. Great to see the energy, ambition and commitment in pushing the boundaries of knowledge around building in cyber and infra software.

Brian NeSmith, founder of Arctic wolf, took the stage to share insights on his early days at Arctic Wolf. Few insights shared:

Meet customers where they are and align to their expectations - eg. in the first years Brian created pseudonyms for himself as a SalesRep, as customers didn’t expect to meet the CEO in a first call
Recognise the signs of market pull - eg. the WannaCry attack in Nov-2017 which severely affected the NHS marked a turning point as the market came to Arctic Wolf in search for a security operating center
The market always wins even against great teams and product - great teams iterate quickly and change market soon enough

Não foi fornecido texto alternativo para esta imagem — Brian NeSmith, Chairman at Arctic Wolf, presenting the unicorn’s story since 2011.

JC Raby, Managing Director at JPMorgan, shared perspectives on the cyber market:

The cyber market has historically outperformed NASDAQ and S&P
Platformization is driving consolidation and there are patterns in M&A - eg. major emerging segments including CSPM, SIEM, DSPM often saw 2-4 early exits, only much later followed by larger exits by the surviving companies who were able to scale
New themes are driving security innovation including:
- Adoption of GenAI tools creating need for new security tools
- Agentic AI driving automation in security
- Convergence of data and identity security in the cloud
- Greater need for robust non-human identity management practices
- Hybrid work environment continues to introduce network security challenges
- Increasing regulation and government directives for cyber incident reporting and security enhancement

Carlos A. Silva and Carlos M. Silva, Managing partners at 33N also shared their perspectives on the last decade in cybersecurity, highlighting that there has been a tremendous acceleration in growth of the developer community, economic value creation and time-to-market of AI.

Sources: Morgan Stanley, Yahoo Finance, EY, Deloitte.

In parallel, the costs of cyber crime grew more than 10x, leading to cybersecurity being a top concern. While some pundits expect budget pressure and vendor consolidation in the cybersecurity market, the total market opportunity in cybersecurity is still 10x larger than current market size.

Sources: World Economic Forum, Mckinsey & company.

Furthermore with the geo-political environment moving to increased protectionism and creation of economic trade clusters, there will be different drivers, trends and challenges. Today these represent different opportunities for commercial and investment opportunities that founders and investors alike should consider strategically.

At 33N we’re on a mission and we’ve only just started: if you’re building, investing or actively interested in Cybersecurity, AI, Data & DevOps, please reach-out.

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