AI Security Seed Funding: Largest Category for Cyber Investment

AI agents are significantly changing where cybersecurity seed funding is directed. Last quarter, AI security was the largest category for cyber seed investment, making up nearly a quarter of all deals. Here's the thing: most of these funded companies focus on securing agentic systems. These agentic products are also appearing in cloud security, application security, AI pentesting, and third-party risk management. What's interesting is that seed deal volume in cyber has actually ticked down, even as the number of product launches increased. Money is moving up the stack, with nine-figure rounds now taking 81% of venture dollars. This means the gap between capital deployed and companies receiving it is the widest in eight years. The bottom line: valuations are climbing, and seed rounds are now priced like 2018's Series A rounds, showing a major shift in investment priorities within cybersecurity.