Why PGP-Related Assets Are Overvalued and Pose Strategic Risks

In the rapidly evolving landscape of cybersecurity and SaaS infrastructure, the valuation of assets tied to legacy cryptographic tools like Pretty Good Privacy (PGP) is increasingly at odds with the realities of modern security demands. As enterprises and investors pivot toward solutions that prioritize usability, forward secrecy, and integration with zero-trust architectures, PGP's technical obsolescence and poor user experience are exposing significant strategic risks. This misalignment between legacy tools and modern alternatives like Sigstore and FIDO2 is not merely a technical debate-it is a financial one, with profound implications for valuation models in the cybersecurity sector.

PGP's Technical Obsolescence and User Experience Challenges

PGP, once a cornerstone of secure communication, is now a relic of the 1990s. Its design, rooted in a complex state machine and manual key management, struggles to meet the demands of modern SaaS environments. A critical vulnerability lies in its lack of forward secrecy: historical messages encrypted with PGP can be decrypted if a private key is later compromised, a flaw that newer protocols like FIDO2 explicitly address by using ephemeral session keys. According to a report by the Chaos Communication Congress, PGP's implementation flaws-such as the ability to bitflip plaintext in compressed messages-have enabled plaintext recovery attacks, further eroding trust in its security guarantees.

Compounding these issues is PGP's notoriously poor user experience. Key rotation, revocation, and trust management require technical expertise that most users lack, leading to widespread misuse and configuration errors. In contrast, Sigstore simplifies code signing and verification with human-readable workflows and integration with FIDO2 hardware tokens like YubiKey, which derive SSH keys securely and intuitively. This usability gap is not trivial; it directly impacts adoption rates and, by extension, the market viability of PGP-dependent solutions.

The Rise of Sigstore and FIDO2: A Paradigm Shift

Modern cryptographic solutions like Sigstore and FIDO2 are redefining security standards in ways that PGP cannot match. Sigstore, for instance, leverages FIDO2 and WebAuthn for passwordless authentication, enabling secure, auditable software supply chains. By using hardware-backed keys and decentralized notarization, it eliminates the need for manual key management while ensuring transparency in artifact verification. Similarly, FIDO2's phishing-resistant authentication model-rooted in public-key cryptography- addresses the vulnerabilities inherent in password-based systems, a critical advantage in an era of AI-driven social engineering attacks.

The adoption of these technologies is accelerating. A 2025 analysis by NIST highlights a broader industry shift toward lightweight, specialized cryptographic standards tailored for IoT and SaaS environments, underscoring the limitations of PGP's monolithic design. Enterprises are increasingly prioritizing solutions that align with zero-trust architectures, where continuous verification and minimal trust assumptions are paramount. For SaaS providers, this means moving beyond PGP's static encryption model to dynamic, identity-centric frameworks that Sigstore and FIDO2 enable.

Investment Implications: Overvaluation and Strategic Risks

The financial risks of clinging to PGP are becoming evident. Cybersecurity SaaS valuations in 2025 are driven by metrics like Annual Recurring Revenue (ARR) growth and Net Revenue Retention (NRR), with the Rule of 40 (combining growth and profitability) serving as a key benchmark. However, companies reliant on PGP face a double jeopardy: their offerings are increasingly perceived as outdated, and their ability to address modern threats-such as AI-fueled phishing or third-party OAuth exploits-is limited.

Data from 2025 reveals a stark divergence in valuation multiples. While application security and identity management (IAM) startups command high multiples due to their alignment with zero-trust and DevSecOps trends, IAM deal values have plummeted by 94% since 2024, reflecting investor skepticism toward legacy tools. Meanwhile, Sigstore and FIDO2 adopters are attracting capital for their scalability and alignment with enterprise needs. For example, Cyera's $540 million Series E round at a $6 billion valuation highlights the market's appetite for AI-integrated, passwordless platforms.

The overvaluation of PGP-related assets is further exacerbated by the growing cost of SaaS security incidents. In 2025, 78% of enterprises reported significant SaaS-related breaches, with 65% linked to misconfigurations and third-party integrations. PGP's inability to address these risks-such as securing dynamic API interactions or managing OAuth tokens-makes it a liability for SaaS providers. Startups that fail to modernize their encryption strategies risk misalignment between their perceived value and actual utility, a gap that investors are increasingly unwilling to tolerate.

Conclusion: A Call for Strategic Realignment

The cybersecurity sector's shift toward Sigstore and FIDO2 is not merely a technical evolution but a financial imperative. PGP's technical limitations-poor UX, lack of forward secrecy, and vulnerability to plaintext attacks-render it ill-suited for the dynamic, identity-first world of SaaS. As valuation multiples for legacy-dependent companies stagnate or decline, investors must prioritize assets that demonstrate adaptability to modern threats. The overvaluation of PGP-related tools is a cautionary tale: in cybersecurity, clinging to the past is a recipe for obsolescence.