The round marks the largest investment ever made within the industrial cybersecurity sector, establishing Claroty’s market leadership as the world grapples with an uptick in cyberattacks on critical infrastructure in recent months. The new funding will be used to accelerate the company’s expansion into new verticals and regions and further enhance its best-in-class product portfolio.
The round is co-led by Bessemer Venture Partners’ Century II fund, which is specifically designed for growth-stage market-leading companies that will define the next century, and 40 North, the related investment arm of privately-held global industrial company Standard Industries. Additional strategic investors include LG, the global innovator in technology and manufacturing, and I Squared Capital’s ISQ Global InfraTech Fund. All previous investors, including Temasek, Team8, and long-time customers and partners Rockwell Automation, Siemens, and Schneider Electric, have also participated. The round brings the company’s total funding to $235 million.
“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,” said Yaniv Vardi, CEO of Claroty. “With this new investment from the most prestigious firms in the world, we have the financial runway to execute on our proven product strategy in a hyper-growth market, with a world-class leadership team and a strong ecosystem of partners to take us there.”
There has been a clear and distinct shift since 2020 in the frequency and impact of cyber attacks against organizations that underpin the world’s critical infrastructure and supply chains. According to Cybersecurity Ventures, global ransomware damage costs are predicted to exceed $265 billion by 2031, up from $20 billion in 2021. As these incidents show no signs of slowing, Claroty’s new investment has firmly positioned the company at the forefront of the market with the resources, experience, and capabilities needed to shore up industrial cyber defenses for the future.
Claroty is trusted by the world’s leading organizations to protect their industrial assets, connections, and processes, with deployments in thousands of locations and facilities across all seven continents. For example, the company has worked closely with Pfizer to secure its COVID-19 vaccine supply chain in its race to meet unprecedented global demand.
The round is the latest in a series of milestones for the company, including:
- 133% expected year-over-year (YoY) growth in new annual recurring revenue from 1H 2020 to 1H 2021
- 110% YoY net new logo growth and 100% customer retention, including James Hardie, Coca-Cola EuroPacific Partners (Australia, Pacific, Indonesia), and IRPC Public Company Limited
- 80 new employees hired in the Americas, EMEA, and APAC in 2021; on track to grow headcount by nearly 50% by end of year
- Expanded partner coverage by 50% in 2020 with the addition of Deloitte, KPMG, PwC, CrowdStrike, Atos, Yokogawa, and others to its new FOCUS Partner Program
- Released Claroty Edge, a new, patent-pending addition to The Claroty Platform and the industry’s first zero-infrastructure industrial cybersecurity solution
- Named winner of ‘Best IOT/IIOT Security Solution’ in SC Awards Europe 2021
- With over 120 ICS vulnerability disclosures to date, the Claroty Research Team leads the ICS threat research industry by far, helping Claroty’s strategic partners to deliver more secure products
Claroty will use the funds to meet rapidly accelerating global demand for The Claroty Platform’s visibility, threat detection, risk and vulnerability management, and secure remote access capabilities by expanding into new verticals and regions, growing global headcount, bolstering its commitment to securing IoT devices, and further empowering customers’ journey to the cloud.
“We launched Bessemer’s growth fund to invest specifically in clear market leaders,” said David Cowan, partner at Bessemer Venture Partners. “We are focused on helping the next generation of category-defining companies that have standout product-market fit, scalability, and a strong executive team. Since our first investment in Claroty in 2016, the company has continued to demonstrate that it has the best vision, team, and technology to address the unique challenges in the critical infrastructure security sector.”
“David Winter and I are passionate about investing in high-potential companies, especially those focused on building the industrial future,” said David Millstone, co-CEO of Standard Industries and co-CIO of 40 North. “Cybersecurity is a crucial component of that effort, and Claroty has proven itself as the most experienced, innovative, and visionary company in this industry. We look forward to working with its top-notch team to secure the new industrial revolution.”