Xage raises top-up funding round of US$6 million, as critical infrastructure organizations focus on federal mandates

Xage raises top-up funding round of US$6 million, as critical infrastructure organizations focus on federal mandates

Close to the heels of its January Series B funding round, zero trust security company Xage announced Thursday that it has raised an additional US$6 million in top-up funding, bringing total funding to $60 million. The additional funds come at a time when the company’s customer base in the energy, defense, utilities, manufacturing, and logistics sectors has more than doubled in the past year. 

Furthermore, two-thirds of the customers are accelerating rollouts to address increased cyber risks and meet the Department of Homeland Security’s Transportation Security Administration (TSA) and other government mandates by the end of this year. The frantic pace has led to more energy investors jumping on board, while the number of customers in the critical infrastructure sector doubled, with pipeline owners and operators, in particular, accelerating their zero trust rollouts to meet TSA guidelines and block potential Russia-related hacks.

Xage said that the $6 million top-up funding comes from the Venture arm of SCF Partners, a major investor in energy and critical infrastructure services, and Overture Climate Fund, a venture fund targeting startups at the intersection of government, energy, and climate. The money will be used to expand Xage’s go-to-market operations to service the growing demand from critical infrastructure organizations globally, the company added.

In addition to the top-up funding, the company has also expanded its team. Sri Sundaralingam, previously at ExtraHop and Symantec, has joined Xage as senior vice president of marketing, part of the company’s expansion plans since it closed its Series B funding round. The latest top-up funding also follows continued recognition for the company’s technology. 

Critical infrastructure companies are prime targets of cyberattacks. To help the sector bolster its cybersecurity posture, the federal government has rolled out a gamut of directives and guidelines that hinge on a zero trust strategy. Furthermore, recent CISA warnings of Russian state-sponsored threats on critical infrastructure make compliance even more urgent.

“Intensifying cyber risks, combined with government mandates such as TSA’s pipeline regulations, have forced critical infrastructure operators to find practical ways to implement zero-trust in real-world operations,” Duncan Greatwood, CEO of Xage, said in a company statement. “Until recently, operators were content to rely on perimeter security and threat detection systems, but the new risks, new mandates, and new cyber technologies have led to a reevaluation and an urgent embrace of zero trust,” he added.

Now, “critical infrastructure operators are implementing zero trust systems that do more than just detect hackers — they block attacks outright,” according to Greatwood. “The momentum we’ve seen in our business over the past year is a testament to that change.”

“Cyberattacks on physical operations have exploded with a 20x increase in the past two years alone, prompting the Biden Administration to issue a series of stark Executive Orders mandating that all critical physical infrastructure be secured by zero-trust cybersecurity systems,” Shomik Dutta, Overture co-founder and managing partner, wrote in a LinkedIn post. “Cybersecurity for operational infrastructure is already a $100 Billion market that will soon grow to $200 Billion by 2030,” he added.

Dutta also said that Overture will prove a valuable co-investor for Xage. “Our team includes Liz Dalton, a former Principal Deputy Assistant Secretary at the US Department of Energy who helped lead cybersecurity efforts for the federal agency. Overture will help Xage benefit from the federal government’s focus on zero-trust solutions across their major existing revenue segments and unearth new opportunities across the US government and foreign allies,” he added.

“We are excited to partner with Xage to tackle one of the industry’s most difficult and challenging issues: safeguarding critical infrastructure including from outside threats. Xage blocks attacks before the hackers gain traction, preventing devastating scenarios for operations and the people they serve,” said Hossam Elbadawy, managing director at SCF Partners. 

“Xage enables organizations to transition from basic operational technology (OT) security measures to a Zero Trust model, which is an essential step in securing innovation and cyber hardening the energy and critical infrastructure sectors,” according to Elbadawy. “We look forward to helping them continue their growth in the global energy and infrastructure sectors,” he added.

In an advisory released this week, global cybersecurity agencies warned organizations of recent reports that observe an increase in malicious cyber activity targeting managed service providers (MSPs) and expect this trend to continue. MSPs provide services that usually require both trusted network connectivity and privileged access to and from customer systems. Several organizations, ranging from large critical infrastructure organizations to small- and mid-sized businesses, use MSPs to manage ICT systems, store data or support sensitive processes.

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