Legacy Vendors Fill Product Gaps
Momentum Cyber’s May 2026 Cybersecurity Market Review reflects a market that remained active despite softer headline volumes, with 31 M&A transactions and 46 financing transactions announced during the month. Activity was led by Security Services, Risk & Compliance, and AI Security, while capital deployment remained selective as investors continued to concentrate around differentiated, high-priority platforms.
Executive Summary
May 2026 highlighted two distinct acquisition playbooks: legacy vendors including Cisco, Akamai, Zscaler, and Snowflake used M&A to fill product gaps and create cross-sell opportunities, while VC-backed players such as Torq and Cyera pursued smaller, high-upside acquisitions of emerging AI-driven security companies. The market continues to favor targeted, strategic moves over broad-based volume.
Key Report Takeaways.
Key Report Takeaways.
M&A transactions in May 2026 down 21% year-over-year
31
Cyber Services M&A deals, almost double the next closest Sector (Risk & Compliance, with 4)
7
in disclosed M&A value
$
823
M
financing transactions completed in May 2026
46
in total capital deployed in May 2026
$
365
M
median deal size, reflecting balanced early- and mid-stage investment activity
$
8
M
AI Security financing capital deployed in 2026 YTD
$
2
B
Al Security M&A deals in May 2026 alone
4
Al Security M&A is on pace to increase 400%+ in 2026
400
%+
Download the Full Report
The complete Q1 2026 Cybersecurity Monthly Market Review includes:
- Detailed M&A and financing transaction breakdowns
- Sector-by-sector analysis across 12 cybersecurity categories
- Public market performance and valuation metrics
- Strategic insights on AI Security, Risk & Compliance, and platform consolidation
- Complete deal lists with disclosed valuations and strategic rationale
- Forward-looking indicators for 2026 and beyond
About Momentum Cyber
Momentum Cyber is the premier trusted advisor to the global cybersecurity industry, providing M&A advisory, capital raising, and strategic research services. With 68 cybersecurity transactions completed, $25B+ in cybersecurity deal value, and unparalleled industry relationships, Momentum Cyber delivers mission-critical advice to leading founders, CEOs, and decision-makers.
By The Numbers
M&A Highlights
Deal Volume & Value
- 37 total M&A transactions
- $1.0B in disclosed deal value
- 8 disclosed transactions
- $125M average disclosed deal value
Top Acquirers
- Check Point Software made 3 acquisitions (Cyata, Cyclops Security, Rotate) worth combined $150M
- Palo Alto Networks acquired KOI for $400M to secure agentic endpoint protection
- Varonis acquired AllTrue.ai for $126M to extend AI trust and governance capabilities
Most Active Sectors
- Security Services: 13 deals
- Risk & Compliance: 4 deals
- AI Security: 4 deals
- Data Security: 4 deals
- Digital Channel Security: 3 deals
Financing Highlights
Capital Deployment
- $563M total capital raised
- 61 financing transactions
- $12M median deal size
- 15% below 13-month median count
Stage Distribution
- Early Stage & Series A: 40 deals, $266M deployed (median: $7.2M)
- Series B: 3 deals, $65M deployed (median: $25.0M)
- Series C+: 14 deals, $207M deployed (median: $50.0M)
Top Financed Companies
- UpGuard: $75M Series C (Springcoast Partners)
- Gambit Security: $61M Series A (Kleiner Perkins)
- GitGuardian: $50M Series C (Insight Partners)
- Astelia: $35M Series A (Index Ventures)
- Orion Security: $32M Series A (Norwest Venture Partners)
Most Active Sectors by Deal Count
- Risk & Compliance: 18 deals, $271M
- Identity & Access Management: 8 deals, $102M
- AI Security: 7 deals, $57M
- Security Operations: 6 deals, $50M
- Digital Channel Security: 5 deals, $25M
Strategic Market Insights
AI Security Consolidation Arrives
February 2026 marks an inflection point for AI Security M&A. With 4 transactions in a single month, the segment is experiencing the buying window that operators and investors have anticipated since enterprise AI adoption accelerated in 2024-2025.
Key AI Security Transactions
- Palo Alto Networks acquired KOI ($400M) for agentic endpoint security
- Varonis acquired AllTrue.ai ($126M) for AI trust and governance
- Check Point acquired Cyata for AI agent discovery and control
- Proofpoint acquired Acuvity for unified protection across humans, data, and AI agents
The market is recognizing that AI security is no longer speculative. Enterprises are deploying autonomous agents, and acquirers who move early are securing critical capabilities at reasonable valuations before premium pricing takes hold.
Capital Concentrates at Scale
February financing activity reinforced the flight-to-quality dynamic. Five deals accounted for 45% of total capital deployed, while median deal sizes compressed to $12M as early-stage volume balanced late-stage concentration.
$100M+ Financing Activity Accelerates
- Q1 2026 is projected to match 2025's quarterly average of 6 deals worth $1.4B in $100M+ rounds
- Median investment size in $100M+ deals increased to $200M (up from $159M in 2024)
- Median post-money valuation for $100M+ deals reached $1.85B
This bifurcation reflects investor conviction that scaled platforms with demonstrated efficiency can command premium capital, while earlier-stage companies face more disciplined funding environments.
Record M&A Momentum Continues
February’s 37 M&A transactions extend the elevated deal velocity observed throughout 2025 and into early 2026. The first two months of 2026 are on pace for 489 total M&A deals, which would represent 22%+ growth over 2025’s record 400 transactions.
Historical Context
- February 2026: 37 deals (4th highest month ever)
- January 2026: 38 deals (3rd highest month ever)
- Only June 2025 (42 deals) and May 2025 (39 deals) recorded higher monthly totals
Strategic buyers are driving this acceleration. With stronger enterprise budgets, platform consolidation imperatives, and the urgency to own AI-enabled security infrastructure, acquirers are moving decisively on targets that extend their capabilities or fill critical gaps.
About
Momentum Cyber is the premier trusted advisor to the global cybersecurity industry, providing M&A advisory, capital raising, and strategic research services. With 68 cybersecurity transactions completed, $25B+ in cybersecurity deal value, and unparalleled industry relationships, Momentum Cyber delivers mission-critical advice to leading founders, CEOs, and decision-makers.
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