Dragos raises $200 million in series D funding

Dragos, a global cybersecurity for industrial controls systems (ICS)/operational technology (OT) environments, has raised $200 million in Series D funding at a valuation of $1.7 billion. This marks the largest funding round and the highest valuation achieved by an OT cybersecurity company, providing further validation for the demand for OT cybersecurity. The funding will continue to accelerate the company’s global expansion and support customers in key growth markets across diverse industries including electric, oil & gas, chemical, pharmaceutical, food and beverage, water, and manufacturing.

The funding round was led by Koch Disruptive Technologies, an investment arm of Koch Industries, and funds and accounts managed by BlackRock, a leading global asset manager. 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.

Robert M. Lee, Chief Executive Officer and Co-Founder of Dragos says: “Executives around the world from corporate leadership to government officials have continued to note the criticality of protecting OT and the need to do so with OT specific approaches.

"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. 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.”

The funding comes at a time of explosive growth for industrial cybersecurity. While the importance of cybersecurity to critical infrastructure is not new, 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 ICS/OT operations has driven a unique opportunity for the private and public sectors to partner to keep communities safe and the global services and goods citizens rely upon available.

Byron Knight, Managing Director and Chief Operating Officer at Koch Disruptive Technologies says: “Koch Industries is modernising the operations of our more than 500 global facilities and Dragos has quickly proven to be a key partner in delivering the industrial cybersecurity protection we and our customers need.

"We believe the Dragos Platform plays a key part in managing risk across our enterprise, delivering the products and services our customers depend on without interruption. Our repeated investments in Dragos underscore our confidence in their technology and team and demonstrates our commitment in defending our operations against cyberattacks at the industrial level.”  

One such customer of Koch Industries is Georgia-Pacific, which has more than 160 locations worldwide and produces some of the most recognized chemical, construction, and consumer paper brands in North America. “Worker safety and business continuity are essential, and the Dragos Platform provides us with the visibility, detection, and response capabilities we need to secure our operations and protect the business,” said Francis Cioffi, Chief Information Security Officer (CISO) of Georgia-Pacific LLC. “Koch Industries has shown they are committed to supporting growth and innovation in the OT cybersecurity market by investing in best-in-class industrial cybersecurity companies such as Dragos and bringing that deep domain expertise and value to organizations like Georgia Pacific.”

The investment from Rockwell, a global leader in industrial automation, signifies the increased prioritization companies are placing on OT cybersecurity to safeguard enterprise-wide operations. “A fully connected enterprise requires a comprehensive approach to industrial security,” said Rachael Conrad, vice president and general manager, Global Services for Rockwell Automation. “This is not only a strategic investment for us, but a reflection of the commitment we’ve seen from the manufacturing community to take industrial cybersecurity more seriously. This activity will allow our customers, who are transforming their manufacturing and industrial operations through cloud and enterprise technologies, to have further protection of their operational environments and help them maximize the value of their digital transformation initiatives.”

The Series D funding will accelerate Dragos' expansion to make ICS/OT cybersecurity more accessible around the world and will bolster the company’s support for ICS/OT practitioner-oriented events, education, and community networking opportunities in new verticals and regions.

The round is the latest in a series of milestones for Dragos, including:

• Expansion of global operations in the United Kingdom, Australia, New Zealand, and within the Gulf Cooperation Council including Saudi Arabia and the United Arab Emirates with plans for an office in Dubai.
• New initiatives with Neighborhood Keeper—a free, opt-in, anonymized information-sharing network available to all Dragos Platform customers and the first-of-its-kind collective defense and community-wide visibility offering for OT cybersecurity:
  • Joint initiative with the North American Electric Reliability Corporation‘s (NERC) Electricity Information Sharing and Analysis Center (E-ISAC) to strengthen collective defense and community-wide visibility for industrial cybersecurity in the North American electricity industry with 84 utilities, representing over 70% of electric utility customers in the US, currently adopting.
  • Initiative with the Oil and Natural Gas Information Sharing and Analysis Centre (ONG-ISAC) to strengthen security and community-wide visibility for industrial cybersecurity in the North American oil and natural gas industry.
  • Initiative with Downstream Natural Gas Information Sharing and Analysis Centre (DNG-ISAC) to strengthen security and community-wide visibility for industrial cybersecurity in the North American natural gas industry.
• Founding sponsor of The Smart Factory @ Wichita, a new Industry 4.0 immersive experience centre by Deloitte.
• Over 100% YoY growth in platform recurring revenue for the period ending Sept 30, 2021.