Dragos picks up $200 million in funding, as OT cyber security market booms
Industrial cybersecurity company Dragos announced Thursday that it has raised US$200 million in Series D funding at a valuation of $1.7 billion, reflecting increasing demand for OT cyber security techniques and solutions. This investment comes as industrial cyberattacks continue to rise highlighting the fact that OT cyber security is different and needs a different approach.
The additional funding raises the stakes for the Hanover, Maryland-based company, as it claims ‘the largest funding round and the highest valuation achieved by an OT cybersecurity company.’ The funding will also help with Dragos’ global expansion and support customers in key growth markets across diverse industries, including electric, oil and gas, chemical, pharmaceutical, food and beverage, water, and manufacturing.
“There’s a lot of pressure when you’re out in front, especially in a space that has never gotten this kind of attention before, to do right by the community,” Robert M. Lee, CEO and co-founder of Dragos, told Industrial Cyber. “That’s the kind of pressure that makes us better though and we’re honored to take the challenge and highlight the amazing work of the infrastructure community and how much focus they put into keeping our communities safe.”
Dragos’ funding round was led by Koch Disruptive Technologies, an investment arm of Koch Industries, and funds and accounts managed by global asset manager BlackRock. Investors include Emerson, Hewlett Packard Enterprise, Allegis Cyber, Canaan, DataTribe, Energy Impact Partners, National Grid Partners, Schweitzer Engineering Labs, Global Reserve Group, and Rockwell Automation.
“The risks are not just in cyberattacks, though those are becoming more numerous and aggressive, but also in ensuring the appropriate insights into ICS/OT environments to maintain resilience as our world’s infrastructures and industrial automation environments become more connected and more complex,” according to a company statement. “The Series D represents further validation on the importance of our mission but is only possible due to our customers and partners. Their tireless efforts to secure our infrastructure too often goes underappreciated,” it added.
The investment comes at a time when the industrial cybersecurity sector is witnessing growth, and the criticality of cybersecurity to critical infrastructure is not a new concept. Recent cyberattacks are increasing awareness for what much of the OT community has known for a long time.
Furthermore, the availability of OT-specific approaches in the market at a time governments and executives are demanding more focus on their industrial control system (ICS) and OT operations have driven an opportunity for the private and public sectors to partner to keep communities safe and the global services and goods citizens rely upon available.
The various cyberattacks occurring are highlighting that OT is different and needs a different approach to security, Lee said. “That highlighting is happening at a policy leader and executive leader level in each of these organizations and government agencies. There’s a clear tipping point happening where executives and policy makers are educated on why approaching OT cybersecurity is different and necessary. That’s a good thing. The work now is in taking that attention and turning it into productive action without hype, fear, or knee jerk reactions,” he added.
The Series D funding round will accelerate Dragos’ expansion to make ICS/OT cyber security more accessible around the world, while also bolstering the company’s support for ICS/OT practitioner-oriented events, education, and community networking opportunities in new verticals and regions.
Lee said that “the funding will help us continue to expand globally and have us meet our customers where they are. We are first and foremost their partners. To partner we need to be in the field with them not just a help desk call when they have product questions. This funding further enables us to get to the field where the mission is.”
Last week, Dragos announced the expansion of its global presence into the UK to provide organizations with direct access to its industrial cybersecurity technology and services, in addition to developing and training ICS/OT cyber security talent across the region.
This follows the company’s plans earlier this year to grow its presence in Australia and New Zealand to support industrial cybersecurity customers across those regions. Dragos also expanded global operations within the Gulf Cooperation Council including Saudi Arabia and the United Arab Emirates, with plans for an office in Dubai.
Dragos also set up a joint initiative with the North American Electric Reliability Corporation‘s (NERC) Electricity Information Sharing and Analysis Center (E-ISAC) for using the Dragos Neighborhood Keeper technology. The deal works towards strengthening collective defense and community-wide visibility for industrial cybersecurity in the North American electricity industry.
It also worked with the Oil and Natural Gas Information Sharing and Analysis Center (ONG-ISAC) to strengthen security and community-wide visibility for industrial cybersecurity in the North American oil and natural gas industry, and the Downstream Natural Gas Information Sharing and Analysis Center (DNG-ISAC) to strengthen security and community-wide visibility for industrial cybersecurity in the North American natural gas industry.
Earlier this month, another industrial cybersecurity company aDolus Technology announced that it has raised $2.5 million in its latest funding round, which the company will use to pursue an aggressive go-to-market strategy, timed to meet the sharply growing demand for supply chain security solutions, particularly in critical industries. The oversubscribed funding round by aDolus follows a year marked by high-profile software supply chain attacks and increasing cybersecurity initiatives from the U.S. government.
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