A category of venture capitalist firms has emerged focusing entirely on cybersecurity investments, a move driven both by the rapid growth in security threats and the increasing technical complexity of the marketplace, which can make it harder for generalist investors to spot promising early-stage startups.

While larger, generalist VC firms still account for the majority of security investments, at least two security-oriented venture firms have opened their doors in Silicon Valley in the past few years, while a third firm has shifted its practice to focus solely on security. The trio has raised new funds in the past two years totaling $500 million. The smaller, more-focused firms tend to specialize in finding interesting, early-stage startups, rather than late-stage investments.