Ted Schlein’s Ballistic Ventures seeks $490M for new funds amid AI-driven cybersecurity boom

The VC firm raising significant capital underscores the market's focus on AI's role in cybersecurity, both as a threat and an opportunity.

Ballistic Ventures, a cybersecurity-focused venture capital firm co-founded by Ted Schlein, is seeking to raise $490 million across two new funds. Regulatory filings reveal plans for a $360 million third flagship fund, mirroring the size of its 2024 fund, and a separate $130 million vehicle named Ballistic Ventures Fund B. This fundraising effort occurs against a backdrop of heightened concerns over AI-driven cyberattacks and new opportunities for cybersecurity startups. Ballistic Ventures, established in late 2021, has previously backed companies like Talon Cyber Security and Pangea. In 2022, it launched its debut fund with $300 million and raised $360 million for its second flagship fund in 2024, alongside a $130 million separate vehicle. Cybersecurity startups in the U.S. saw significant investment in 2025, with AI-enabled companies comprising a large majority of venture deals.

The move by Ballistic Ventures signals strong investor confidence in the cybersecurity sector, particularly in solutions addressing AI-powered threats and leveraging AI for defense. The substantial capital being sought reflects a belief that the ongoing AI arms race in cybersecurity will continue to generate high-growth startup opportunities. This environment is attractive to VCs looking to replicate past successes, as evidenced by Ballistic's past exits and the broader market trends.

This influx of capital could accelerate innovation in AI-driven cybersecurity solutions, potentially leading to new technologies that offer advanced threat detection and response capabilities. Startups in this niche can expect increased funding availability, but also greater scrutiny as investors bet on those best positioned to capitalize on the evolving threat landscape. The success of these new funds will likely influence future investment strategies within the cybersecurity VC community.