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The market to catch cyberattackers is hot. And it will only continue to heat up, Allie Mellen, a cybersecurity analyst at Forrester, told Insider.

A report from the data firm Research and Markets suggested the global cybersecurity market was estimated to be worth $173.5 billion in 2022 and could grow to $266.2 billion by 2027.

Businesses are looking for new ways to protect their data. Mellen said companies have become more prone to attacks that can cost them tens of millions of dollars to fix as they move to the cloud. As a result, hackers are developing more sophisticated ways to steal data even legacy tech companies such as Cisco, Nvidia, and Twilio with established internal security measures were victims of attack this year, Mellen said.

In turn,venture-capital firms are pouring billions of dollars into cybersecurity startups to help keep businesses secure. Rama Sekhar, a partner at Norwest Venture Partners, said that as companies invest in more cloud tools, they'll also buy more tools to keep their security up to date.

"A lot of the security companies are now focused on cloud," he told Insider.

Alex Kayyal, a Salesforce Ventures managing partner, said the move to hybrid and remote work made that demand even greater.

"The office has become an infinite canvas of a location, and so security becomes that much more important," he said.

Additionally, VCs told Insider that cybersecurity isn't an area where companies are likely to cut spending in a downturn.

But cybersecurity is a mature industry, dominated by giants like Microsoft, IBM, and Oracle. Mellen said there's room for innovation in helping businesses protect cloud servers, pinpoint vulnerabilities in their data systems, secure internet browsers, and enable employees with no coding expertise to build out their firm's cybersecurity strategy.

Mellen added that businesses aren't adopting the new tools quickly.

Insider asked several VCs to pick the most promising cybersecurity startups both in and out of their portfolios. All company valuations and funding information are according to PitchBook unless otherwise noted.

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The 13 Most Promising Cybersecurity Startups of 2022 - Business Insider