Summa’s Christian Melby: Increased cyber threats drive innovation in the sector

Jacob Frandsen and Christian Melby discuss the rationale behind Summa Equity's acquisition of Logpoint.

Summa Equity believes that the increased vulnerability of digital infrastructure and rise in cyber threats will create opportunities in the cybersecurity sector, partner and CIO Christian Melby and investment director Jacob Frandsen told PE Hub Europe.

The Stockholm-based private equity firm announced the acquisition of Logpoint, a Danish cybersecurity operations platform, in early March. Logpoint is a provider of various security technologies converged into a single platform: foundational security information and event management (SIEM), user and entity behavior analytics (UEBA), security orchestration, automation and response (SOAR), and systems applications and products (SAP) security technologies.

“We see a lot of M&A activity in the sector,” Melby said. “And from the Summa perspective, our vision, from the start, has been to invest to solve global challenges.”

Melby described the cybersecurity market as “almost unfortunately” growing fast, due to increased cyber threats, which accelerated particularly after Russia’s invasion of Ukraine. “That simply creates a more vibrant market and more innovation,” he added.

The European Union Agency for Cybersecurity (ENISA) listed state sponsored, cybercrime, hacker-for-hire actors and hacktivists as the prominent threats in their reporting period from July 2021 to July 2022. The World Economic Forum highlighted the European energy sector as a vulnerable target, as cyberattacks in the sector could prove “disastrous” in already precarious markets. Amsterdam-Rotterdam-Antwerp (ARA) oil refining hubs took a cyber hit in February 2022, interrupting trade across the region, for instance.

“The vulnerability that relates to digital infrastructure is getting higher and higher and there are more imminent threats, which is why we feel for Summa to invest in cybersecurity is very meaningful and right,” Melby explained. “And it’s a sub-industry that we’ve been tracking for a couple years now.”

While a growing industry, in Europe the choice of investment options seems limited. “The fact of the matter is that there aren’t many sizeable European cybersecurity companies within the space,” Melby explained. “And this was partly also the attraction for investing in Logpoint.”

All avenues

With Logpoint, Summa will primarily focus on organic growth, according to Frandsen. Given Logpoint has completed two other acquisitions, Immune in 2008 and agileSI in 2020, inorganic growth is not completely off the table either. This would be on a more selective basis. “That will be M&A that could complement the Logpoint product as it is now,” Frandsen explained.

Copenhagen-based Logpoint, Summa’s first platform investment in Denmark, is present in 11 locations across Europe, the US and Asia. Europe will remain a priority for the company, according to Frandsen. “But then, of course, given that the product is also selling well in other areas, then we should also prioritise those,” he said. “But first and foremost, it’s a European player, so to speak.”

While it is early days for Summa to think about a potential exit, having all three exit options available – IPO, trade sale and private equity sale – with Logpoint was an appealing factor for Frandsen. “I think what we liked about this case, is that actually, all these avenues are open.”