How private equity finds and creates value in a multi-billion dollar industry

Based on 1,999 private equity transactions and 18 expert interviews: where investors find value in cybersecurity and how sales and pricing turn acquisitions into growth.
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1,999

Private equity transactions analysed (2021–2026)

18

Expert interviews with investors and providers

10+

hy cybersecurity pricing and sales projects

A growing market does not guarantee strong returns.

Cybersecurity offers compelling fundamentals for private equity: regulation supports demand, high switching costs strengthen customer relationships and a fragmented market creates opportunities for consolidation. But not every segment offers the same investment potential. And acquiring a strong cybersecurity business is only the beginning.

For private equity investors, the challenge is not simply gaining exposure to a growing market. It is identifying the right assets, assessing their commercial potential and turning acquisitions into sustainable growth.

The cyber premium provides a data-led perspective on all three decisions.

Three key takeaways

  • Customer standing, not patents or age

    The median target is 17 years old with 68 employees and only 7% of deals involve companies younger than five years. Investors pay for established relationships with critical customers and high switching costs. Patents play practically no role. More than half of all deals target risk identification, yet six of the ten most attractive clusters in our hy-score sit in protection, led by zero trust access.

    For investors: Assess the customer base before the technology.

  • Europe: More momentum at lower valuations

    Since 2023, the number of European cybersecurity deals has grown by 19% a year, more than twice the 8% in the Americas. At the same time, European median revenue multiples are around 30% lower (7.2x vs. 10.3x). Data sovereignty is a real sales driver: customers in critical infrastructure increasingly buy European.

    For investors: Europe combines stronger deal momentum with lower entry valuations.

  • Seven in ten buyouts are add-ons, but scale alone does not create value

    Around three quarters of cybersecurity deals are buyouts and 70% of these are add-ons, mostly in fragmented services. Most targets are technically strong but commercially underdeveloped: customised offers, prices set without data and sales teams steered by quarterly revenue.

    For investors: Clear packages, value-based pricing and recurring models turn scale into valuation.

What’s inside for investors

From investment opportunities to commercial value creation.

The study explores four questions relevant to private equity investors:

Sourcing opportunities

Where European cybersecurity markets offer potential and why data sovereignty matters.

Attractive cybersecurity clusters

Which segments rank highest in the hy-score and what drives their scores.

Commercial due diligence

Why commercial maturity, customer relationships and market positioning matter alongside technology.

Value creation after closing

How pricing, packaging and sales can strengthen cybersecurity portfolio companies after acquisition.

Get the cyber premium study.




    Meet the authors

    Christoph Röttgen

    Christoph Röttgen, Senior Vice President in the Pricing & Sales Business Unit at hy, is an experienced expert on the subject of pricing. His passion for this topic began during his master's thesis on the importance of pricing models in the introduction of innovative services. With over ten years of strategic and operational experience in Pricing & Sales, he offers our clients valuable support in monetizing digital business models. Christoph started his career at Simon-Kucher & Partners, led the Pricing & Monetization consulting team at Axel Springer and was most recently responsible for building the international Pricing & Discount Strategy team at HelloFresh. Christoph holds a Master's degree in Management with a focus on Marketing from the University of Mannheim. During his studies and professional career, he spent several months in various countries, including Spain, the USA, Argentina, India and Singapore.

    Sam Shahneh

    Sam Shahneh is a Senior Consultant in Pricing & Sales at hy, where he supports clients in developing pricing, go-to-market, and growth strategies. He brings experience from more than 15 projects and has worked closely with private equity investors in particular. Prior to joining hy, Sam spent 3.5 years at Roland Berger and A. Lange & Söhne (Richemont). In addition, he gained relevant experience in pricing and commercial excellence at other international companies, including Chrono24, Bayer, Simon-Kucher, and Siemens. Sam holds a Bachelor’s degree in Industrial Engineering and Management from the Technical University of Berlin and a Master’s degree in Management from WHU – Otto Beisheim School of Management and the Rotman School of Management at the University of Toronto.

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