Dragos raises additional $74 million in Series D extension funding round, as OT demand accelerates

September 18, 2023

Industrial cybersecurity firm Dragos announced a US$74 million Series D extension, led by operating and investing firm WestCap. The capital will fuel additional Dragos expansion as demand accelerates to protect operational technology (OT) in critical and industrial infrastructure.

The equity investment is an extension of Dragos’s $200 million Series D that took place in October 2021, led by Koch Disruptive Technologies, an investment arm of Koch Industries, with funds and accounts managed by BlackRock, a leading global asset manager. This brings the Series D round to $274 million, with total funds raised to date now approximately $440 million.

“The industrial threat landscape irreversibly changed this past year, and critical industries are seeking solutions that give them visibility into their OT networks and defend against the threats making headlines and driving government action,” Robert M. Lee, chief executive officer and co-founder of Dragos, said in a media statement. “Demand for OT cybersecurity continues to be strong and this extension allows us to scale. What’s really exciting is that WestCap, as lead investor, is a partner in our success and shares our commitment to build the collective defense to protect industrial organizations and the communities they serve.”

The extension round arrives as governments and infrastructure providers globally are recognizing the importance of industrial cybersecurity and demanding more attention to their ICS/OT environments. This shift is demonstrated in the release of the Biden administration’s National Cybersecurity Strategy this year, and the March 23 hearing before the U.S. Senate Committee on Energy and Natural Resources, during which Lee testified on the cybersecurity risks to energy infrastructure. Internationally, government initiatives across Europe, the Middle East, and Asia-Pacific are having a similar impact.

“As cyberattacks escalate in frequency and complexity, it is critical that we support the scaling of leading companies like Dragos whose mission is to ‘safeguard civilization,'” said Laurence A. Tosi, founder and managing partner at WestCap. “Dragos is the category leader in protecting critical infrastructure with a holistic cybersecurity approach in the Operational Technology segment led by a respected leadership team with a proven track record for investigating the most high-profile cybercrimes in recent history and building innovative technology to isolate and combat those threats.”

The Series D funding extension will bolster Dragos’ ability to make ICS/OT cybersecurity more accessible around the world. This year, Dragos has already expanded across Western Europe and the DACH region, building on its presence in the U.K.

Dragos has also entered into an agreement with Macnica to provide its cybersecurity solutions in Japan, signifying Dragos’s expansion in Asia-Pacific beyond its presence in Australia and New Zealand.

In August, the company signed a three-year Memorandum of Understanding (MOU) with the Cyber Security Agency of Singapore (CSA) to support the country’s efforts to defend against cyber-attacks to its operational technology and critical infrastructure. Dragos also continued to grow its footprint in the Middle East through its established presence in the Kingdom of Saudi Arabia and United Arab Emirates.

“The global industrial cybersecurity market will likely hit $10.2 billion by 2025 from $3.3 billion in 2020, registering exponential growth at a compound annual growth rate (CAGR) of 25.3%,” according to analyst firm Frost & Sullivan. “The funding will support additional go-to-market initiatives to meet growing demand. It will also fund accelerated expansion in key growth markets including North America, Europe, the Middle East, and Asia-Pacific; and across diverse industries including electric, oil & gas, chemical, manufacturing, pharmaceutical, food and beverage, water, transportation, mining, and building automation.