Paladin Capital Group, a venture-capital firm focused exclusively on cybersecurity, achieved six exits in 2025, a difficult year for dealmaking amid tariffs and geopolitical turmoil.

Not all exits were big wins – some were just acqui-hires, said Mourad Yesayan, managing director, and Chris Steed, managing director and chief investment officer, in a joint interview.

The larger exits in 2025 were grounded in Paladin’s philosophy of leveraging its Washington DC location to track government-sector innovation and translate it into private-sector opportunity. “The same problem the government has, large enterprises have,” Yesayan said.

Case in point: CalypsoAI. The AI security provider announced its sale to F5 in September for USD 180m, or 90x its enterprise revenue of USD 2m at the time of Paladin’s initial investment in 2020.

Paladin led Calypso’s USD 13m Series A in 2020 alongside Lightspeed, Lockheed Martin and other investors. “We were ahead of our time – enterprise AI adoption was very nascent,” he said. At the time, the US government was spending USD 5bn per year on artificial intelligence (AI) and machine learning but only 5% of that was being put into production.

“Trust in AI models was a key adoption barrier,” he noted. Calypso initially focused on defense-grade solutions for the US Department of Defense, generating millions of dollars in government revenue. “Our thesis was following demand signals inside the DoD,” said Yesayan.

As generative AI tools such as ChatGPT gained traction around 2022, enterprises began grappling with employee use of “shadow AI,” prompting Calypso to pivot its go-to-market strategy to enterprises, said Yesayan. Paladin led a USD 23m follow-on financing in 2023.

Calypso’s acquirer, F5, recognized the gap that needed to be addressed in the private sector. “That drives a strategic premium. It was a very significant return – we were the company’s largest shareholder,” Yesayan said. The deal came together in only about five months, he added.

Paladin’s other large exit in 2025 was Corellium, another company with roots in government sales that transitioned to the private sector. In June, Corellium announced its sale to Cellebrite, a listed company, for USD 200m. Corellium simulates threats to devices and software using ARM chip architecture, including smart phones and Internet-of-Things devices, Yesayan said.

Paladin invested in Corellium in early 2021, leading a USD 2.5m convertible note followed by a USD 25m Series A alongside Cisco. Corellium had USD 16m revenue at the time of the exit, representing a tenfold increase from when Paladin invested. “It was at a price that we and the founders felt was a good reward for a four-year investment,” he said.

Both the Calypso and Corellium exits came after inbound interest, he said. In each case, Paladin had invested with a strategic. “We like to build a syndicate with companies that can be partners or acquirers down the road,” he explained.

More recently, Paladin portfolio company Hawkeye 360 filed an S1 in April after Paladin invested as part of a large round early this year. The company’s revenue grew 74% year-over-year to more than USD 100m in 2025, rising to USD 175m after acquisitions, Yesayan said.

Multi-stage strategy

Paladin, which has offices in New York, London, Silicon Valley and Luxembourg, is marking its 25th anniversary. It makes investments ranging from late seed stage to Series B; with around 80% of its investments backing companies generating less than USD 5m to USD 10m in revenue, said Yesayan. Paladin ensures that the revenue trajectory is repeatable, solidifying product market fit and the company’s go to market strategy, he explained.

Steed said 70% of investments are in US companies, with 30% in the UK, European Union and Australia. Equity checks typically range from five to eight figures, with Paladin acting as lead investor in more than 80% of deals, Steed said.

For 2026, the firm plans to identify opportunities in the agentic AI ecosystem, where new tools are needed to securely deploy and monitor autonomous systems, Yesayan said.

In September 2025, Paladin invested in Mimica, a UK firm with software that translates human processes into AI driven workflows, augmenting what humans do. Another investment theme for Paladin this year is automated recovery and remediation following outages and cyber attacks, enabling rapid infrastructure reconstruction and facilitating operational recovery, Yesayan said. An investment around this thesis is to be announced, he added.

The firm is also interested in automated remediation of flaws in software. “How do we Band-Aid it on-the-fly? We are actively looking at companies in that arena.”There is a strong need for antifraud protection given the increase in deep fakes, he said.

Paladin is investing from its sixth flagship fund, which is targeting USD 300m and is expected to hold a final close by year-end. Fund VI had its first close in mid-2025 and has already completed seven deals, with two or three more deals expected in the near-term, said Yesayan.

The firm typically makes 30 to 35 investments per fund. Paladin Fund V closed in 2020 at USD 372m, exceeding its USD 250m target. The current fund is being raised from a broad base of longtime limited partners, about two thirds of them US insurance companies, corporations and institutional investors as well as family offices and multifamily offices.

The remaining third is sovereign wealth funds, funds of funds and family offices based in Europe and the Middle East, Yesayan said. “A lot of the same investors have backed us for multiple funds,” he said, but new ones are investing as well.