Industrial cybersecurity giant Dragos raises new funding, aims for global expansion

Today, Dragos revealed that it has secured a $74 million Series D expansion funding round, led by strategic operating and investment firm WestCap.

The funding expansion comes as governments around the world and infrastructure providers increasingly recognize the critical role of industrial cybersecurity, requiring an increased focus on their ICS/OT metrics.

In an interview with Help Net Security, Darren Sankbeil, CFO of Dragosdiscusses the importance of this investment to the enterprise amid growing urgency to safeguard ICS/OT ecosystems.

Cybersecurity of ICS/OT environments

The Series D extension led by WestCap brought the total Series D funding to $274 million. What does this level of investment signal about the state and future of industrial cybersecurity?

Despite recent reductions in some IT cybersecurity budgets, OT security is a relatively new market that will continue to grow rapidly through the remainder of this decade and beyond. This increase in investment coincides with a pivotal year marked by irreversible changes in the industrial threat landscape and increasing demands from governments and infrastructure providers around the world.

Previously, OT threats were limited in that they had to be tailor-made for a specific industrial environment, or even a single location. However, PIPEDREAM represents an evolution of OT-specific malware capable of launching broader and faster attacks because it is scalable across industry sectors. Thus, industrial organizations recognize the importance of industrial cybersecurity and demand more attention to their ICS/OT environments. And governments are launching initiatives to protect critical infrastructure, like the Biden administration’s national cybersecurity strategy this year. Internationally, government initiatives in Europe, the Middle East and Asia-Pacific are taking similar steps.

The funding is intended for commercialization initiatives and accelerated expansion across various regions and sectors. Could you explain to us which markets and sectors Dragos considers to be the most crucial for its growth?

Dragos’ potential customer base continues to grow as various industry sectors adopt our technology. Building on the growth we have consistently seen in our core markets in North America, Australia and the GCC, we have identified Europe and Asia Pacific as emerging opportunities for our business.

Additionally, during the second quarter of this year, we experienced notable diversification in the sectors represented among our new clients. In addition to our strong historical presence in the power, oil and gas, water and federal sectors, we see that the manufacturing, food and beverage and technology sectors are growing in importance as a percentage of our business. These trends indicate exciting prospects for continued growth and expansion for our customer base.

Dragos has been expanding into Western Europe and the DACH region and has also struck a deal in Japan. What are the global challenges and opportunities in scaling ICS/OT cybersecurity solutions?

At Dragos, we strive to provide the best OT cybersecurity products and services that meet the requirements of all customers across a diverse set of industries and regions. Maintaining a consistently high level of quality in the delivery of all our products worldwide is what we strive for and what our customers expect. This year we launched the Dragos Global Partner Program, the only channel program to include OT cybersecurity technology, services, and threat intelligence and training. The program allows us to scale globally while ensuring our partners have the skills and capabilities to deliver our OT cybersecurity solutions with the highest quality and customer satisfaction.

Interest from partners to join the program has been very strong, and one example is that we signed an agreement with Macnica to provide our cybersecurity solutions to Japan. We also work closely with regional governments to meet their unique needs and recently signed a three-year memorandum of understanding (MOU) with the Cyber ​​Security Agency of Singapore (ASC) to support the country’s efforts to defend against cyberattacks on its operational technology and critical infrastructure.

According to Frost & Sullivan, the global industrial cybersecurity market is expected to grow from $3.3 billion in 2020 to $10.2 billion by 2025. What factors are driving this exponential growth and how Dragos is Is it positioned to conquer this market?

The exponential growth predicted for the global industrial cybersecurity market, as outlined by Frost & Sullivan, is driven by several key factors. Companies’ growing awareness of the cybersecurity challenges their operations face is leading to a higher rate of adoption of solutions like Dragos’. As the threat and regulatory landscape evolves, organizations recognize the imperative need to protect their industrial control systems.

Dragos is strategically positioned to capture this growing market for several reasons. We offer a comprehensive combination of software and services, allowing us to tailor our solutions to meet customers at different stages of their OT cybersecurity journey. This flexibility allows us to serve as a trusted advisor to our clients, helping them navigate the complex industrial cybersecurity landscape.

The Dragos Platform is technology built for practitioners by practitioners that equips industrial cybersecurity teams with the latest defensive tools, codified by our experts on the front lines every day to hunt, combat and respond to advanced ICS threats. Customers benefit from complete visibility of OT assets and threats in their systems, with guidance on best practices for responding before a significant compromise.

Our commitment to providing best-in-class products and forming strong partnerships with our customers has positioned us as one of the leading OT cybersecurity solutions providers today. This customer-centric approach not only sets us apart today, but also lays the foundation for our continued leadership in the ever-evolving industrial cybersecurity market in the future. By constantly adapting to emerging threats and customer needs, Dragos remains committed to delivering the most effective technology solutions on the market.

What can we expect from Dragos in the next 2 to 5 years, especially with this new capital injection? Are there any technologies or strategies on the horizon?

Over the next 2-5 years, our primary focus will be on strengthening and expanding our core software and service offerings. These foundational solutions have shown remarkable potential, but our commitment to growth and innovation remains unwavering.

As we move forward, we will actively seek opportunities to enter new industries and geographies, expanding our reach and impact in the industrial cybersecurity space. However, it is important to note that our approach is rooted in a client-centric approach. We understand that the threat landscape requires continuous adaptation and we are committed to listening to our customers. Their feedback and needs will guide our innovation efforts, ensuring we remain at the forefront of the industry.

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