Dragos, a leading cybersecurity company, has raised an impressive $74 million in an extension to its original Series D funding round, which took place in October 2021.
With a focus on defending industrial technology environments like water utilities and power-grid operators, Dragos provides specialized cybersecurity software. The extension round was led by venture-capital firm WestCap Investment Partners, following the 2021 Series D led by Koch Disruptive Technologies.
This additional funding will enable Dragos to expand beyond its traditional markets in Europe and the U.S., according to Chief Executive Robert Lee. The company has already made significant progress in this regard, as it recently signed agreements with reseller Macnica to provide its products in Japan and with the Cyber Security Agency of Singapore to support cybersecurity efforts.
Lee stated that the primary reason for raising more financing was the opportunity for expansion and emphasized the need for valid reasons to seek funding. He added that partnering with WestCap would also grant Dragos access to a pool of experienced advisors who have knowledge of the regions they aim to penetrate.
Dragos’s funding comes at a time when cybersecurity in critical infrastructure operators, especially industrial settings, has garnered increased attention from the federal government. Lee testified on this issue during a hearing held by the Senate in March, and critical infrastructure was a significant focus of the Biden administration’s National Cybersecurity Strategy released in the same month.
Concerns about the safety of critical infrastructure have been amplified by incidents like the ransomware attack on Colonial Pipeline in May 2020 and a suspected intrusion into a water-treatment plant in Oldsmar, Fla., in 2021.
Security chiefs from various industries report constant attacks from hackers—both nation-state groups and criminal attackers. Jamey Sample, chief security officer at power company Xcel Energy, revealed that their systems face tens of thousands of attempted breaches each week, employing methods such as phishing, botnets, and other automated attacks.
Sample described the security team as “battlefield commanders” and emphasized the frontline nature of their role.
With this extension round, Dragos’s total funding reaches approximately $440 million. Lee has expressed consideration for an initial public offering (IPO) in the future, although this remains uncertain. He believes in the value of taking the time to build a long-term company, rather than rushing toward an exit that solely benefits early investors.
While some cybersecurity companies quickly accessed public markets during the investment boom of 2020 and 2021, some have subsequently delisted due to current economic uncertainties. Others have chosen to merge with special-purpose acquisition companies, which allow listing without a traditional IPO process.
WestCap founder and managing partner Laurence Tosi believes that Rob, Dragos’s CEO, will exercise patience in this regard due to the breadth of his mission and the significant challenge it entails. Although a future IPO is likely, the specific timing remains unknown.
Contact James Rundle at [email protected].
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