Dragos Raises $74 Million in Series D Extension Round

Estimated read time 3 min read
Estimated read time 3 min read

Cybersecurity company Dragos has raised an additional $74 million in an extension to its original Series D funding round, held in October 2021.

Dragos provides cybersecurity software specifically designed to defend industrial technology environments, such as water utilities and power-grid operators. The extension round was led by venture-capital firm WestCap Investment Partners, with the 2021 Series D led by Koch Disruptive Technologies.

The funding will allow the company to continue its expansion outside of its traditional heartland in Europe and the U.S., said Chief Executive

Robert Lee.

Dragos signed an agreement this summer with reseller Macnica to provide its products in Japan, and in August signed an accord with the Cyber Security Agency of Singapore to support cybersecurity efforts.

Lee said the company’s primary reason for raising more financing was “the opportunity to expand, you’ve got to have real reasons to take funding.” He added that bringing WestCap on board also gave the company access to a bench of advisers who have experience in the regions it aims to move into.

Dragos’s funding comes as the issue of cybersecurity at critical infrastructure operators, and in particular industrial settings, has received renewed attention from the federal government. In March, the Senate held a hearing on the issue, at which Lee testified, and critical infrastructure was a significant component of the Biden administration’s National Cybersecurity Strategy released in March.

Incidents such as the ransomware attack on Colonial Pipeline in May 2020, and a suspected intrusion into a water-treatment plant in Oldsmar, Fla., in 2021 have raised concerns about the safety of critical infrastructure.

Security chiefs say that they are coming under unrelenting attack from hackers of all stripes. This includes nation-state groups and criminal attackers, said

Jamey Sample,

chief security officer at power company

Xcel Energy.

The company sometimes fends off tens of thousands of attempts a week to break into its system by phishing, botnets and other automated attack methods, he said.

“I tell my team, ‘We’re the battlefield commanders now, and we’re the front-line battle space,’” said Sample.

The extension round brings Dragos’s total funding to roughly $440 million. Lee said that he is considering an initial public offering in the future, although this will be several years away, and is still not certain. 

“There’s a reason it takes longer, a reason you do it this way. And if you’re just focused on quickly getting there, that’s benefiting your early investors who are looking at an exit,” he said.

“That’s not how you build long-term companies,” he said.

During a boom period of investment into cybersecurity companies around 2020 and 2021, some companies quickly accessed public markets. But amid the current economic uncertainty, some have since delisted. Others merged with special-purpose acquisition companies, a setup that allows businesses to list without going through a traditional IPO process.

“Some people went public too early, and that really can be damaging to a company. Rob is so focused on the breadth of his mission and realizes the gravity of what he’s undertaking, that I think he’ll be patient,” said

Laurence Tosi,

founder and managing partner at WestCap. “It will be a public company at some point, we just don’t know when yet,” he said.

Write to James Rundle at [email protected]

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