Dragos, a maker of software to secure control systems for manufacturing and industrial equipment, has raised $74 million in a Series D round extension led by WestCap.
The round, which brings Dragos’ total funding to $440 million, keeps the startup’s post-money valuation unchanged at $1.7 billion for a second straight year. Dragos CEO Robert Lee says the new money will be put toward “continuing to grow and expand” the company’s customer base, which is about 400 organizations and governments.
“Equity provides Dragos with the most operational flexibility,” Lee told TechCrunch in an email interview. “The Series D funding expansion will enhance Dragos’ ability to further facilitate industrial cybersecurity around the world.”
Lee co-founded Hanover, Maryland-based Dragos several years ago with Justin Cavini and John Lavender, drawing inspiration from his time as a cyber warfare operations officer in the US Air Force. Through Dragos, Lee hopes to help asset owners and operators – particularly in industries such as electric, water, oil and gas, and chemicals – protect infrastructure from threats targeting hardware monitoring, managed and controlled devices in industrial settings.
Data indicates that attacks on this hardware, known as industrial control systems, are increasing not only in frequency but also in sophistication. Waterfall Security Solutions, a competitor of Dragos, reported 57 attacks on industrial control systems in 2022 – a 140% increase in the number of attacks compared to the previous year.
Meanwhile, a recent survey by ABS Group, a consultancy group for the marine and offshore oil, gas and chemical sectors, found that 45% of organizations consider the risk to their control systems to be “high”, while another 15% agree that they are. “Severe or severe.”
Frost & Sullivan predicts that the global market for industrial cybersecurity will reach $10.2 billion by 2025, up from $3.3 billion in 2020.
“Bad actors are leveraging cyber attacks to target and control the world’s industrial infrastructure environment,” Lee said. “Once a relative ‘air gap’, industrial controls have become increasingly linked to IT network.”
Dragos seeks to secure these controls by providing visibility into an organization’s assets and communications. The company’s platform leverages analytics to identify threats, helps prioritize vulnerabilities and provides a playbook for responding to attacks.
Lee claims Dragos is one of the few industrial control security vendors to offer managed hunting services and threat intelligence services for customers. Dragos detects — and reports — threat activity in industrial control system environments, and allows customers to optionally, anonymously share threat intelligence with the wider community.
Dragos, which has a 500-person workforce, has focused on aggressive expansion over the past several months. During this spring and summer, his presence increased in Western Europe, particularly Germany, Austria, and Switzerland; expanded its footprint in Saudi Arabia and the United Arab Emirates; and signed an agreement with Macnica IT consultancy to provide Dragos products in Japan. Just in August, Dragos signed a three-year contract with the Singapore government’s cybersecurity arm, supporting its operational technology and the country’s efforts to defend against cyber attacks on critical infrastructure.
Beyond direct contracts and customer engagement, Dragos is working to get its partner program off the ground. Launched this year as the Dragos Global Partner Program, the program trains partners who resell, manage and deploy Dragos’ platform with asset detection and threat detection services.
In a previous interview, Lee said Dragos intended to eventually do an IPO. It seems it’s only a matter of when.