Claroty Raises $140M in Pre-IPO Funding - Industrial Cybersecurity

Claroty Secures $140 Million in Funding

Claroty, a leading provider of industrial cybersecurity solutions, has successfully raised $140 million in a recent funding round. This investment is intended to bolster the company’s efforts in protecting and managing Internet of Things (IoT) and operational technology (OT) assets for its clientele.

Series D Funding Details

This Series D funding round was jointly led by Bessemer and 40 North, bringing Claroty’s total funding to $235 million. Strategic participation included investments from LG and I Squared Capital’s ISQ Global InfraTech Fund.

Existing investors – Team8, Rockwell Automation, Siemens, and Schneider Electric – also contributed to this financing.

Company Growth and Focus

Established in 2015, Claroty concentrates on cybersecurity specifically tailored for industrial environments. The company serves a diverse customer base, including prominent organizations like General Motors, Coca-Cola EuroPacific Partners, and Pfizer.

Notably, Claroty assisted Pfizer in safeguarding its COVID-19 vaccine supply chain. The company reports substantial customer acquisition, experiencing 110% year-over-year growth in new logos and maintaining 100% customer retention over the past 18 months.

Utilizing the New Funds

The newly acquired capital will be allocated to address the escalating global demand for The Claroty Platform. This platform delivers comprehensive visibility into industrial networks.

It combines secure remote access capabilities with continuous threat and vulnerability monitoring, providing an end-to-end security solution.

Claroty’s Mission and Expansion Plans

“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,” stated Yaniv Vardi, CEO of Claroty.

To accommodate this growth, Claroty intends to expand its operations into new sectors, such as transportation and government, and increase its global workforce. Currently, the New York-based company employs approximately 250 individuals.

Potential Acquisitions and IPO

While Claroty has not yet pursued any acquisitions, CEO Yaniv Vardi indicated that this remains a possibility. He stated that the company is actively seeking suitable opportunities.

Vardi also suggested that this funding round is likely to be the company’s last private financing before considering an Initial Public Offering (IPO). Alternative options, such as a Special Purpose Acquisition Company (SPAC), are also being considered.

Rising Cybersecurity Threats

This funding arrives during a period of heightened cyberattacks targeting critical infrastructure and supply chains worldwide. A recent Claroty survey revealed that 53% of U.S. industrial enterprises have observed an increase in cybersecurity threats since 2020.

The survey, which included 1,110 IT and OT security professionals, also found that over half believe their organizations are now prime targets for cybercriminals, with 67% reporting the use of new attack tactics during the pandemic.

Increased Risk and Demand for Solutions

“The number of attacks, and impact of these attacks, is increasing significantly, especially in verticals like food, automotive, and critical infrastructure,” Vardi explained. “That creates a lot of risk assessments public companies had to do, and these risks needed to be addressed with a security solution on the industrial side.”