Cybersecurity firm Dragos nears US$2 billion value after funding

[WASHINGTON, DC] Cybersecurity startup Dragos Inc has raised a US$200 million funding round co-led by a BlackRock Inc fund and Koch Industries Inc, an investment that gives the cybersecurity startup a nearly US$2 billion valuation.

Dragos focuses on the operational technology of industrial control systems, unlike traditional security systems that protect mainly computer networks. The startup works with companies that monitor oil and gas, manufacture chemicals, perform mining and handle production line management.

"The market opportunity is so much larger than anyone else realised," Dragos chief executive officer Robert Lee said. "BlackRock and Koch saw that." About half of the new funding comes from those two investors, the company said.

Lee, a former US Air Force cyberwarfare operations officer, said the 6-year-old Dragos was not looking to raise more cash, but that the investors approached the company. Dragos raised US$110 million last year at a US$400 million valuation. Lee said the latest funding round, which more than quadruples the startup's valuation, will set Dragos up to make a public market debut in the next year and a half. "This is the last round we need to be able to go public," he said.

The security of operational technology, or OT, is a fast-growing market. Headline-making attacks have highlighted the vulnerability of critical infrastructure. Those include hackers breaching the Colonial Pipeline Co and an attempt to poison the Oldsmar, Florida, water supply in February. In April, the Biden administration unveiled a 100-day plan to protect the US power grid from cyberattacks. Lee said that Dragos now monitors 70 per cent of the US electric grid by meter, and shares insights with the government through a program called Neighborhood Keeper.

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