Claroty has secured $140 million in a Series D financial round, which, the company claims, marks the largest investment ever made within the industrial cybersecurity sector.
The company says the funding establishes Claroty’s market leadership as the world grapples with an uptick in cyber attacks on critical infrastructure in recent months. Claroty will use the funding to expand into new verticals and regions and to enhance its product portfolio.
The round is co-led by Bessemer Venture Partners’ Century II fund, which Claroty says is specifically designed for growth-stage market leading companies that will define the next century, and 40 North, the related investment arm of privately-held global industrial company Standard Industries.
Additional investors include LG and I Squared Capital’s ISQ Global InfraTech Fund. All previous investors, including Team8 and long-time customers and partners Rockwell Automation, Siemens, and Schneider Electric, have also invested. The round brings the company’s total funding to $235 million.
“Our mission is to drive visibility, continuity, and resiliency in the industrial economy by delivering the most comprehensive solutions that secure all connected devices within the four walls of an industrial site, including all operational technology (OT), Internet of Things (IoT), and industrial IoT (IIoT) assets,” explains Claroty CEO Yaniv Vardi. “With this new investment from the most prestigious firms in the world, we have the financial runway to execute on our proven product strategy in a hyper-growth market, with a world-class leadership team and a strong ecosystem of partners to take us there.”
Since 2020, the frequency of cyber attacks against organisations have increased. According to Cybersecurity Ventures, global ransomware damage costs are predicted to exceed $265 billion by 2031, an increase from $20 billion in 2021. The new investment equips Claroty with the resources, experience, and capabilities needed to support industrial cyber defences in the future.
Claroty says it is trusted by the world’s leading organisations to protect their industrial assets, connections, and processes, For example, the company has worked closely with Pfizer to secure its COVID-19 vaccine supply chain to meet global demands.
Aside from the funding, Claroty identifies its own milestones including:
• 133% expected year-over-year (YoY) growth in new annual recurring revenue from 1H 2020 to 1H 2021
• 110% YoY net new logo growth and 100% customer retention, including Coca-Cola EuroPacific partners (Australia, Pacific, Indonesia) and IRPC Public Company
• 80 new employees hired in the Americas, EMEA, and APAC in 2021; on track to grow headcount by nearly 50% by end of year
• Expanded partner coverage by 50% in 2020 with the addition of Deloitte, KPMG, PwC, CrowdStrike, Atos, Yokogawa, and others to its new Focus Partner Program
• Launched Claroty Edge, a new, patent-pending addition to The Claroty Platform
• Won Best IOT/IIOT Security Solution in SC Awards Europe 2021
• With over 120 ICS vulnerability disclosures to date, the Claroty Research Team leads the ICS threat research industry, helping Claroty’s strategic partners to deliver more secure products
Claroty says it will also use the funds to meet global demand for The Claroty Platform’s visibility, threat detection, risk and vulnerability management.
“We launched Bessemer’s growth fund to invest specifically in clear market leaders,” says Bessemer Venture Partners partner David Cowan. “We are focused on helping the next generation of category-defining companies that have standout product-market fit, scalability, and a strong executive team.”
Cowan notes that since the first investment in Claroty in 2016, “the company has continued to demonstrate that it has the best vision, team, and technology to address the unique challenges in the critical infrastructure security sector.”
“David Winter and I are passionate about investing in high-potential companies, especially those focused on building the industrial future,” concludes Standard Industries co-CEO and 40 North co-chief information officer 40 North David Millstone. “Cybersecurity is a crucial component of that effort, and Claroty has proven itself as the most experienced, innovative, and visionary company in this industry. We look forward to working with its top-notch team to secure the new industrial revolution.”