Industrial cybersecurity startup Claroty Ltd. today announced that it has raised $400 million in new funding, money that no doubt comes in handy for its acquisition of “internet of things” security company Medigate Tech Ltd.
SoftBank Vision Fund 2 led the Series E round. Also participating in the round were ISTARI, Team8 and Standard Investments. Yossi Cohen, head of SoftBank’s investment activities in Israel, will join Claroty’s board of directors.
Founded in 2015, Claroty offers an industrial cybersecurity solution that is designed to help customers reveal and protect their operational technology, IoT and industrial IoT assets. The company’s platform is designed to connect seamlessly with customers’ existing infrastructure and programs while providing a full range of industrial cybersecurity controls for visibility, threat detection, risk and vulnerability management.
As noted when it raised $140 million in June, Claroty pitches itself as offering a platform tuned to the highly specialized requirements of industrial infrastructure such as factory control systems. The platform covers three main use cases: finding vulnerable devices, detecting malware and allowing administrators to access industrial hardware securely over the network.
In one use case, Claroty noted, securing “cyber-physical” systems or CPS — which integrate sensing, computation, control and networking into physical objects and infrastructure — is a particularly acute challenge in the healthcare sector because of the proliferation of IoT and “internet of medical things” devices connecting to hospital networks. Some 82% of health systems have reported experiencing an IoT cyberattack in the last 18 months.
Beyond critical infrastructure, Claroty claims, organizations of all kinds are increasingly reliant on CPS to run their building management systems, surveillance cameras, heating ventilation and air conditioning systems, and many other physical processes.
“While connectivity between the cyber and physical systems in manufacturing, healthcare, energy and other industries is driving significant competitive advantages via increased operational agility and resilience, it also creates greater exposure to risks with serious consequences for patient safety, public safety, and the environment,” Yaniv Vardi, chief executive officer of Claroty, said in a statement.
Medigate was founded in 2017 and offers a medical device security platform that protects connected devices on healthcare provider networks. The company’s platform offers threat detection and attack prevention services.
The price Claroty paid to acquire Medigate was not disclosed. According to Crunchbase, Medigate had raised $50.4 million in venture capital funding coming into its acquisition. Investors included Maor Investments, Blumberg Capital, U.S. Venture Partners, Partech and YL Ventures.
“We built the industry’s first dedicated healthcare IoT security platform to empower healthcare providers to deliver secure, connected care,” said Jonathan Langer, co-founder and CEO of Medigate. “Becoming a part of Claroty means our customers will not only continue to receive the best security for their healthcare IoT devices but will also gain coverage for the wide array of industrial IoT assets in their networks, without having to stitch together disparate tools for each.”
Including the new round, Claroty has raised $635 million to date.
