Dragos Raises $74M in Series D Extension Round

The funding will enable the company to continue its expansion outside its traditional core in Europe and the United States, said chief executive Robert Lee. Dragos signed an agreement this summer with reseller Macnica to supply its products to Japan and in August signed an agreement with Singapore’s Cyber ​​Security Agency to support cybersecurity efforts.

Lee said the main reason the company raised more funding was “the opportunity to grow, you have to have real reasons to accept funding.” He added that the integration of WestCap also gave the company access to a group of experienced advisors in the regions it wishes to expand into.

Dragos’ funding comes as the issue of cybersecurity among critical infrastructure operators, and particularly in industrial settings, is the subject of renewed attention from the federal government. In March, the Senate held a hearing on the issue, during which Lee testified, and critical infrastructure was an important part of the Biden administration’s national cybersecurity strategy released in March.

Incidents such as the ransomware attack on Colonial Pipeline in May 2020 and an alleged intrusion into a water treatment plant in Oldsmar, Florida, in 2021 have raised concerns about the security of critical infrastructure.

Security chiefs say they face relentless attacks from hackers of all stripes. That includes 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 through phishing, botnets and other automated attack methods, he said.

“I tell my team, ‘We are now the commanders of the battlefield and we are the frontline battlespace,’” Sample said.

The expansion round brings Dragos’ total funding to approximately $440 million. Lee said he is considering an IPO in the future, although that will happen several years from now, and he is still not sure.

“There’s a reason it takes longer, a reason you do it this way. And if you just focus on getting there quickly, it benefits your early investors who are considering an exit,” he said.

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

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

“Some people have done an IPO too early, which can really be detrimental to a company. Rob is so focused on scale of his mission and realizes the seriousness of what he is undertaking, that I think he will be patient,” said Laurence Tosi, founder and managing partner of WestCap. “It will be a public company at some point, but we don’t know when yet,” he said.

Write to James Rundle at james.rundle@wsj.com