A group of Swiss researchers, funded by Switzerland’s Cyber-Defence Campus, recently released a comprehensive study that highlights blockchain as the most successful investment in the realm of information security startups.
The study, titled “Evaluating the Effectiveness of Investments in Information Security Startups: An Empirical Examination Across Cybersecurity Sectors Using Crunchbase Data,” categorizes and ranks 19 sectors of information security startups ranging from artificial intelligence to spam filtering.
According to the researchers, investments in blockchain security startups have consistently yielded higher returns compared to sectors such as artificial intelligence, machine learning, and cloud technology. In fact, blockchain claimed the top position with a significant lead, while AI secured second place with an anticipated annualized arithmetic return of 67.25%.
It is important to note that these findings do not represent the broader AI and technology sectors, which encompass non-security hardware and software offerings like Nvidia’s GPUs and OpenAI’s GPT technology.
When focusing solely on security sector investments, blockchain not only emerges as the most lucrative option but also boasts the fastest growth rate. On average, blockchain startups transitioned from their initial funding round to their initial public offering (IPO) in less than three and a half years, whereas startups in other sectors took between four and seven years. E-signature startups, on the other hand, required a decade to reach their IPO.
To conduct this study, the researchers relied on Crunchbase data, which provided comprehensive information on funding rounds. However, the data had some gaps when it came to IPOs. To address this issue, the researchers employed a machine learning approach to fill in the missing data.
The research team also suggests that the exceptional performance of blockchain security startups may be driven by investors’ interest in cryptocurrencies. Consequently, it is worth noting that the study’s data only encompasses the period from 2010 to 2022. The post-COVID period, which has been described as transformative for both blockchain and crypto by other studies, is not included in this analysis.