The second half of 2024 saw a surge of dealmaking activity in cybersecurity internationally. US deals like Mastercard’s [NYSE:MA] purchase of Recorded Future for USD 2.65bn, alongside heightened European activity, made the outlook for 2025 seem promising.

But dealmaking has been quieter than expected with looming uncertainties related to high borrowing rates and policy issues like tariffs. Buyers are increasingly looking at smaller acquisitions, sitting in the USD 100m-USD 300m range.

Companies like Alphabet [NASDAQ:GOOG] and Amazon [NASDAQ:AMZN] are still trying to bulk up their software capabilities and AI native security solutions amid a competitive market and rapidly progressing AI technology. Private equity firms like Thoma Bravo have also been very active in the cybersecurity deal space.

Troy Hooper, Mergermarket’s Los Angeles-based editor, and Cristiano Dalla Bona, Mergermarket’s New York-based senior ECM reporter, join Dealcast host Julie-Anna Needham to discuss the outlook for dealmaking in the sector, including:

• How inexpensive, open-source AI platforms, like DeepSeek, are opening up opportunities for dealmaking and potential criminal activity
• How the rapid developments in AI affect buyers’ needs and shape dealmaking
• Why buyers in cybersecurity are targeting smaller acquisitions rather than megadeals
• Which IPOs could arise in the near future, including unicorns like Orca Security and Wiz

All this and more in this week’s Dealcast.