Momentum Cyber has snagged well-known security industry executive Dave DeWalt to serve as its chairman as the cybersecurity-exclusive advisory firm formally launches in the market.
Formerly known as Momentum Partners, the San Francisco-based company's launch Wednesday coincides with M&A and financing activity occurring at an even more rapid clip, according to data compiled by Momentum Cyber.
The industry saw 175 mergers and acquisitions in 2017, up from 163 in 2016, while the number of security-related financing transactions increased from 267 in 2016 to 290 in 2017, Momentum Cyber found.
"There are so many vendors in a particular category that it's overcrowded, and it's impossible for clients, vendors and partners to distinguish themselves," DeWalt told CRN. "There has to be consolidation."
DeWalt is best known in the security industry for the four years he spent as FireEye's CEO and the five years he spent as McAfee's chief executive. Since stepping down as FireEye's CEO 19 months ago, DeWalt has joined the board of directors at numerous security companies, including ForgeRock, Claroty, ForeScout Technologies, Illusive Networks, Optiv and Israeli cybersecurity think tank Team8.
Momentum Cyber will provide life-cycle services to cybersecurity firms ranging from incubation and helping companies get started to developing and executing an exit strategy via a merger, initial public offering or potential liquidation, DeWalt said.
The company's most significant advantage over major investment banks such as Citi, Morgan Stanley and J.P. Morgan is its domain knowledge of the security space, DeWalt said. Momentum Cyber is involved with an average of eight to 10 cyber deals annually, while the big banks typically work on two or fewer cyber deals each year, according to an overview put out by the company.
"They're an inch deep, a mile wide," DeWalt said. "We're a mile deep, an inch wide."
DeWalt and Momentum Cyber Managing Partners Michael Tedesco and Eric McAlpine have orchestrated a combined more than 200 transactions worth in excess of $200 billion as either advisers or principals. Momentum Cyber's M&A services will therefore go beyond the deal itself and address issues such as post-merger integration, cost and revenue alignment measures, according to DeWalt.
Momentum Cyber's leadership also has experience dealing with most of the venture community, DeWalt said, and plans to use its credentials to connect clients to Silicon Valley's venture capital world. The company doesn't plan to finance customers out of its own pockets so that it can maintain autonomy needed to work with a multitude of venture and equity firms, according to DeWalt.