PRAGUE (Reuters) - A group of former executives and investors from antivirus software maker AVG Technologies (AVGTF.PK) have raised an additional $55 million for their fund that invests in cyber security companies, its managing partner said.
Evolution Equity Partners, which raised $70 million in its first funding round in 2015, is looking to bulk up its portfolio at a time when cyber attacks and hacks worldwide are surging.
Last month, a computer virus dubbed GoldenEye or Petya wreaked havoc on firms in more than 60 countries, disrupting work at ports and factories while causing economic losses estimated in the billions of dollars. [nL8N1JP55N]
Managing partner Richard Seewald said the fund would look to add three to five firms to its portfolio of nine companies, which includes Boston-based cyber security group Carbon Black that has been reported to be a potential stock listing. [nL1N1JQ02A]
Seewald said the fund, based in New York and Zurich, ultimately wanted to have investments in 18 to 25 companies spanning the United States, Europe and Israel.
"The fund is in the portfolio-building phase," he said in a telephone interview. "We are looking at opportunities systematically across all those geographies. Over the next couple of months you will see more activity."
Seewald said the cyber security industry was shifting to next-generation technologies utilising artificial intelligence (AI) and machine-learning (ML), and firms developing this offered the biggest growth opportunities.
Evolution typically invests in $5 million to $25 million chunks. Its latest deal was leading a $10 million funding round for Danish next-generation security platform provider LogPoint to help the company to expand.
Seewald said competition was growing for investments.
Research firm CB Insights data showed a record year for the number of deals in cyber security in 2016. At the same time, security spending is rising and should rise almost 8 percent to $90 billion in 2017 before topping $113 billion by 2020, according to information technology research company Gartner.
Editing by Michael Kah, Louise Heavens and Jane Merriman