Chainguard, a computer and cloud security startup, has reached a valuation of US$3.5 billion after completing its series D funding round.

This round raised US$356 million, led by new investor Kleiner Perkins and existing investor IVP. Participation also came from Salesforce Ventures and Datadog Ventures.

The company’s valuation has nearly tripled since its previous funding round in July 2024, when it was valued at US$1.12 billion.

Founded in 2021, Chainguard offers tools and services aimed at helping businesses secure their software.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Cybersecurity funding shows remarkable counter-cyclical resilience

Chainguard’s massive US$356 million raise reflects a consistent pattern of cybersecurity investments bucking broader tech funding slowdowns.

Total funding to VC-backed cybersecurity startups reached nearly US$11.6 billion last year, jumping 43% over the previous year despite the overall subdued venture capital environment mentioned in the original article.

This continues a longer trend where cybersecurity funding more than doubled from US$8.9 billion in 2020 to over US$21 billion in 2021 during a period of heightened concern about digital vulnerabilities 1.

Companies like ReliaQuest (mentioned in the article raising US$500M at a US$3.4B valuation) demonstrate how the essential nature of security spending protects it from economic uncertainty, with analyst Derek Hernandez explicitly noting that “companies won’t delay security investments when the downside risk is reputational ruin.”

The cybersecurity market is projected to grow from US$172.32 billion to nearly US$425 billion by 2030, representing a compound annual growth rate of 13.8% that significantly outpaces many other technology sectors 2.

2️⃣ The CrowdStrike incident became a transformative catalyst for security investment

The article references how the 2024 CrowdStrike outage encouraged companies to increase security budgets, but the impact was far more profound than suggested.

This single software update error affected 8.5 million Windows systems globally and created estimated losses exceeding $5 billion, with insurers facing approximately $1.5 billion in payouts from a non-malicious incident 3.

Delta Airlines alone filed a lawsuit claiming over $500 million in losses, highlighting the massive financial consequences that extend far beyond the immediate technical disruption 4.