Accelerated global digitalisation, particularly during the Covid-19 crisis, has led to an accompanied rise in cybercrime. Global cybersecurity revenues will see strong growth, reaching $198bn by 2025, up from $125.5bn in 2020, according to GlobalData’s thematic research team. This figure includes software, hardware and services. GlobalData predicts the strongest growth in software, which will increase from $52.1bn in 2020 to $96.5bn in 2025 – representing a compound annual growth rate of 13%. Foreign direct investment (FDI) in IT and software services is the leading sector for global cross-border investment, making the rapidly growing subsector of cybersecurity a focus for locations vying to capitalise on this growth – but which global hubs are succeeding in attracting the most FDI in cybersecurity?


According to Investment Monitor’s FDI project database, London attracted the most inward investment in cybersecurity between 2019 and 2021, with 16 new projects over the three-year period. In a bid to become the world’s premier cybersecurity hub, the UK government has lent support to the sector through public investment as well as the establishment, in 2016, of its National Cyber Security Centre, headquartered in London. In 2018, the government invested £13.5m in the London Office for Rapid Cyber Advancement – a cyber innovation centre and accelerator. According to the City of London Corporation, the UK’s cybersecurity market is worth more than £10bn ($12.15bn), with companies choosing to locate in London for its talent pipeline and access to capital as one of the world’s premier financial services centres. The UK employed more than 50,000 cybersecurity professionals in 2021, representing a 13% growth in headcount compared with 2020. According to the UK government’s 2022 Annual Cyber Sector Report, the sector contributed around £6.4bn to the UK economy in 2021, up from £4.8bn in 2020 – the largest increase since the report began in 2018.


Singapore ranked second for cybersecurity FDI between 2019 and 2021, with 13 projects, according to Investment Monitor’s FDI project database. Singapore is one of the most cyber-attacked countries in the world due to its advanced digitalisation, making cybersecurity a public investment priority. Government initiatives date back as far as 2015 with the establishment of Singapore’s National Cyber Security Agency. In 2016, Singapore invested $10m (S$13.9m) in the ASEAN Cyber Capacity programme to enhance the region’s cybersecurity capacity. Cybersecurity is a key Asian growth sector and, as such, Singapore has established itself as a gateway to the continent, targeting both small and large private enterprises for inward investment.


With nine projects, Montreal in Canada is the global cybersecurity hub that attracted the third-highest number of FDI projects between 2019 and 2021. According to the International Telecommunication’s Union’s 2018 Global Cybersecurity Index, Canada is among the top ten most committed countries in cybersecurity. Montreal is home to the prestigious Institute for Data Valorisation, which has more than 1,400 cybersecurity scientists and over 40 research chairs and labs. In 2021, the city had more than 21,000 workers with skills in cybersecurity, 86% of which have a university degree and 50% a master’s degree, according to investment promotion agency Montreal International.


Dubai in the United Arab Emirates also attracted nine FDI cybersecurity projects between 2019 and 2021, according to Investment Monitor’s FDI project database. Although Dubai ranked as the fourth global location for cybersecurity FDI projects, the emirate failed to attract any projects in 2021. Government efforts to improve inward investment in the subsector are under way. Digital Dubai is an emirate-wide initiative launched in June 2021 to oversee technology, data, digital transformation and cybersecurity. Dubai Electronic Security Centre – as part of Digital Dubai – launched the Cyber Node initiative in April 2022 in partnership with French multinational cybersecurity company Thales to develop a specialised cyber workforce. Cyber Node is the first initiative under the Dubai Cyber Innovation Park, which was also launched in early 2022.


Paris attracted seven greenfield cybersecurity projects between 2019 and 2021. The city has established itself as the national hub for French cybersecurity start-ups, with 63% choosing the capital, according to investment promotion agency Choose Paris Region. The agency also states that the French cybersecurity market was valued at $8.3bn (€7.98bn) in 2020, a figure projected to triple by 2025. Government support for cybersecurity was acknowledged in February 2022 with the establishment of Paris’s Cyber Campus as a headquarters for nationwide cybersecurity collaboration between private companies, public bodies and government departments.

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Belfast attracted seven cybersecurity FDI projects between 2019 and 2021, according to Investment Monitor’s FDI project database. In recent years the Northern Irish city has positioned itself as a centre for cybersecurity expertise. US insurance giant Allstate and financial services company Citi are just two of the many multinationals that have invested in cybersecurity operations in Belfast. US insurance company Aflac also opened its global IT and cybersecurity innovation centre in Belfast in 2020. The city’s cybersecurity expertise is anchored by the Centre for Secure Information Technologies at Queen’s University Belfast, which is globally recognised as a cybersecurity centre of excellence.


Sydney attracted six FDI cybersecurity projects between 2019 and 2021. The UK’s telecommunications provider, BT, selected Sydney as its first cybersecurity research and development centre outside the UK in 2017. The Australian city has since grown its reputation as a global cybersecurity hub with the establishment of the New South Wales (NSW) Cyber Security Innovation Node (CSIN) in July 2019, aimed at growing the region’s cybersecurity sector in line with national programme AustCyber’s wider mission. CSIN works with eight NSW universities including the University of NSW, the University of Sydney, the University of Newcastle, Western Sydney University, Charles Sturt University, Macquarie University, UTS and the University of Wollongong. The University of NSW fosters cybersecurity expertise with university spin-out CyAmast, and it attracted a $1.3m (A$1.7m) investment in July 2020.


Bengaluru (formerly Bangalore) attracted six FDI cybersecurity projects between 2019 and 2021, according to Investment Monitor’s FDI project database. The Indian city is well placed geographically as a continental cybersecurity hub for multinationals including US tech giant IBM. In February 2022, IBM announced it will open its first cybersecurity hub outside the US in the Bengaluru, representing a multimillion-dollar investment in the city's cybersecurity ecosystem.


Dublin attracted five cybersecurity greenfield projects between 2019 and 2021. Cybersecurity is a key technology segment for attracting inward investment to the city. Notable companies include Dublin-based cybersecurity company Tines, which secured $23m in 2021 for its US expansion.


Pune in India, Tokyo in Japan, Sofia in Bulgaria, Toronto in Canada and Munich in Germany all attracted four cybersecurity projects each between 2019 and 2021. Tokyo was the only city among those that ranked in tenth place that increased its project numbers over these three years, while the others all had declining project numbers. Sofia, Toronto and Munich attracted no cybersecurity FDI projects in 2021.

Leading locations for cybersecurity venture capital

A different picture emerges when it comes to venture funding for cybersecurity. According to Crunchbase, the US and Israel combined accounted for nearly 90% of all venture funding for cybersecurity companies in 2020. The UK captured 3% ($262m) in 2020, $80m of which was fundraising for data privacy company Privitar. The US accounted for 76% of global venture funding for cybersecurity companies in 2020, with $5.9bn in capital invested. Cybersecurity venture funding grew 22% in the US between 2019 and 2021, compared with 15% growth in the overall US venture market.

This data is reflected in GlobalData’s 2021 Cybersecurity Future Unicorns report, which found that regional investment activity in the second quarter of 2021 saw more than $8.1bn invested across 209 deals globally, with North America (primarily the US) accounting for more than 58% of the deals, valued at $6.1bn, followed by Europe at 17%. The Middle East and Africa region accounted for about 10% of the deals, primarily including cybersecurity start-ups based in Israel.

Cybersecurity will continue to be a key concern for all companies, according to Investment Monitor chief economist Glenn Barklie. “Although up until now cybersecurity FDI has been relatively low in terms of project numbers, I expect this niche area to experience strong growth, particularly in the next five to ten years,” he says.

Although the current top locations for cybersecurity are likely to drive FDI for the near future, other cities and regions will soon provide offerings, according to Barklie. “It is unsurprising that many of the key cybersecurity destinations are also key fintech hubs,” he adds. Additionally, Barklie expects to see an increase in diversified outbound FDI – reducing the reliance on US, Chinese and Israeli companies to drive global FDI.