Ballistic Ventures Targets $490M Across Two Funds as Cybersecurity Deal Flow Surges

Ballistic Ventures is going back to limited partners with a familiar number. The San Francisco firm co-founded by former Kleiner Perkins partner Ted Schlein has filed with the SEC to raise $360 million for its third flagship fund, matching the size of its 2024 vehicle exactly. A second filing seeks another $130 million for a separate investment vehicle called Ballistic Ventures Fund B. Combined, that's $490 million in fresh capital the firm is asking the market to commit. Neither fund has recorded sales yet, according to the filings TechCrunch reviewed.

The timing is not accidental. Ballistic is a pure-play cybersecurity shop, and cybersecurity is one of the few venture categories where AI has clearly expanded the opportunity set rather than simply adding hype. U.S. cybersecurity startups raised $11.5 billion in 2025, the highest total since 2022, according to a JPMorgan Chase report citing PitchBook data. AI-enabled companies now account for roughly 72% of U.S. cybersecurity venture deals through May of this year, up from just 36% in 2019. That shift in deal composition tells you where capital is flowing and why a specialist firm like Ballistic believes it can raise at scale again.

Ballistic's fundraising history shows steady, not explosive, growth. The firm launched in late 2021 with Schlein, former AT&T Cybersecurity president Barmak Meftah, and Roger Thornton, who co-founded Fortify Software and AlienVault. Its debut fund in 2022 closed at $300 million. The second flagship fund, raised in 2024, hit $360 million, alongside roughly $130 million for a companion vehicle called Fund A, per PitchBook. The new Fund B target mirrors that prior sidecar size almost exactly. This is a firm repeating a proven structure rather than reinventing its model, which is itself a signal of LP comfort with the strategy.

Track Record and Market Positioning

Ballistic has already produced two notable exits. Talon Cyber Security was acquired by Palo Alto Networks for a reported $625 million in 2023. Pangea was bought by CrowdStrike, a deal the firm's own blog post characterized as a strong outcome. Current portfolio companies include Armadin, the agent-swarm security startup founded by Kevin Mandia that raised $255.5 million at a $2.5 billion valuation last month, GetReal, Nudge Security, and Oligo Security. That exit record, modest in count but credible in buyer quality, gives Ballistic a case to make to LPs beyond just thematic timing.

Competitively, Ballistic occupies a specific niche. One cybersecurity investor at a rival firm told TechCrunch that Ballistic's Kleiner Perkins pedigree, via Schlein's two-plus decades there, differentiates its brand and network. But the investor also noted the investment strategy itself closely resembles that of other dedicated cybersecurity funds, including Forgepoint Capital and Ten Eleven Ventures. In other words, the thesis is not proprietary. What may matter more is execution, portfolio construction, and the firm's ability to source deals ahead of generalist VCs now chasing the same AI-security theme.

The demand side of this market is not theoretical. Microsoft's annual Digital Defense Report, released last month, warned that attackers are increasingly deploying AI across phishing, social engineering, and malware development. The report's core point is that AI lets bad actors move faster and operate at greater scale, even when the underlying attack techniques themselves remain largely unchanged. That's a meaningful distinction for investors evaluating the space: the threat isn't necessarily more sophisticated attack vectors, but higher-velocity execution of known ones. Startups that can automate detection and response at matching speed have a clear value proposition to enterprise buyers.

Ballistic declined to comment on its fundraising plans when asked by TechCrunch, which is standard practice for firms mid-raise and not itself a red flag.

Investment Implications

For LPs weighing a commitment, the calculus comes down to three variables: thesis durability, differentiation, and realistic multiple expansion given current valuations. On thesis durability, the data supports continued conviction. Cybersecurity venture funding hit a three-year high in 2025, and the proportion of AI-native deals nearly doubled from 2019 levels. That's not a one-quarter blip; it reflects a structural shift in where enterprise security budgets and venture dollars are converging.

Differentiation is murkier. A fund matching its prior raise size exactly, rather than scaling up aggressively, suggests Ballistic itself is being conservative about deployment pace rather than chasing AUM growth for its own sake. That's a reasonable posture in a market where valuations for AI-security startups, Armadin's $2.5 billion mark being one data point, are already elevated. Overpaying into a hot theme is the fastest way to erode fund-level returns even when the underlying thesis proves correct.

The exit environment also deserves scrutiny. Palo Alto Networks and CrowdStrike have both been active acquirers of Ballistic portfolio companies, and both remain well-capitalized platform players hungry for AI-security capability. That gives LPs some confidence in a credible exit path beyond IPO windows, which remain unpredictable. Still, two notable exits over roughly four years is a thin sample for underwriting an entire fund thesis, and LPs should weigh that against the broader market tailwinds rather than treat past exits as a guarantee of future liquidity.

Watch whether Ballistic closes near its $490 million target or trims it, given how competitive LP fundraising has become across the VC landscape broadly in 2026. Watch too how quickly the new flagship fund deploys into AI-native security startups versus more traditional infrastructure plays. Both will tell you whether this raise is a confident bet on a durable theme or a firm riding momentum before it potentially cools.