by Jared Weiner | 12/13/2021
What Happened?
Claroty made a pair of significant announcements on Wednesday, sharing news of a new $400 million round of Series E funding, while also disclosing an agreement to acquire Medigate, an IoT security company serving the healthcare industry. This round of funding―which brought Claroty’s total to $635 million―was led by Bessemer Venture Partners, Schneider Electric, and SoftBank, among others; financial terms of the Medigate acquisition were not disclosed.
VDC’s View
The $400 million secured by Claroty is the latest in a string of significant investments in the OT/IIoT cybersecurity space in the last six months, which also includes prominent competitors Nozomi Networks ($100 million announced in August) and Dragos ($200 million announced in October). Claroty’s total funding to date ($635 million) now far surpasses that of both Nozomi (approximately $150 million) and Dragos (approximately $365 million.)
Claroty did not disclose any specific near term plans, however, the company’s aforementioned competitors earmarked their new funding to help scale product development and go-to-market efforts globally. Claroty’s suddenly vast resources will almost certainly be used to address similar objectives, while also helping to support its acquisition (and forthcoming integration) of Medigate.
The Medigate acquisition is a product of the evolving nature of IIoT networks, and is indicative of Claroty’s forward-thinking strategy to protect all cyber-physical systems across what the company calls the Extended Internet of Things (XIoT.) While the convergence of OT and IT networks remains an important trend within the industrial cybersecurity community, the convergence between OT networks and IoT devices has recently emerged as another critical market driver.
From IoT sensors for industrial asset tracking, to smart climate controls, to medical devices connected to OT hospital networks, deployments of IoT devices and applications in industrial environments are growing at a rapid pace. Because the expected proliferation of IoT devices will significantly expand the attack surface for industrial organizations, vendors in this space must be prepared to help their customers integrate IoT devices within their overarching OT (and IT) cybersecurity program; Claroty’s acquisition of Medigate will certainly help the company address these objectives.
How will the convergence of OT, IT, and IoT networks continue to shape this market? Which automation suppliers have been most aggressive in addressing OT cybersecurity? VDC explored these topics and more in our recently published report, The Global Market for Industrial Cybersecurity Software & Services.
Please visit our website or contact us for more details!