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Claroty raises $400m, announces intent to acquire Medigate

By Catherine Knowles, Fri 10 Dec 2021

Claroty has raised $400 million in Series E funding and entered into an agreement to acquire Medigate, a healthcare IoT security company.

The round brings the company’s total funding to $635 million, making it the most well-funded cybersecurity company in the industrial (OT), healthcare (IoMT), and enterprise IoT sectors.

Claroty CEO Yaniv Yardi says, “While connectivity between the cyber and physical systems in manufacturing, healthcare, energy and other industries is driving significant competitive advantages via increased operational agility and resilience, it also creates greater exposure to risks with serious consequences for patient safety, public safety and the environment.

“By combining Claroty and Medigate’s deep domain expertise and specialised technologies into a single platform, we will take a giant leap forward on our mission to secure the ever-expanding universe of XIoT for every connected organisation.

"We envision a future where cyber and physical worlds safely connect to support our lives, and with such strong backing from some of the world’s foremost technology investors, we have the resources we need to make this vision a reality.”

The Series E funding was co-led by new investor SoftBank Vision Fund 2, as well as existing investors Bessemer Venture Partners and Schneider Electric.

Other existing investors, including ISTARI (a global cybersecurity platform established by Temasek), Team8, and Standard Investments, participated as well.

Additionally, Yossi Cohen, head of SoftBank’s investment activities in Israel, will join Claroty’s board of directors.

Cohen says, “As digital transformation initiatives drive the essential physical systems that we rely on for even the most basic human needs, securing these systems is ultimately about mitigating risks to human life.

"Claroty’s technology addresses a high-stakes problem in enabling safe digital transformation, and we are eager to partner with the team in its journey to protect the critical infrastructure that is the foundation of the AI revolution.”

Bessemer partner and Claroty board member David Cowan says, “The real threat to society is not the Skynet AI, but human hackers turning our machines against us.

"We see this happening in hospitals, factories, electric and water utilities, transportation, building controls, and oil rigs.

"Bessemer helped get Claroty started in 2016 to restore trust in the world’s physical plant - the new frontier for cyber defence; and now we believe the company’s recognition by Forrester as a Leader in industrial control systems (ICS) security confirms our conviction in its capabilities, traction, and leadership.”

SE Ventures, Schneider Electric’s investment arm CEO Heriberto Diarte says, “As the world continues to rapidly digitise, cybersecurity is becoming a top priority for most organisations.

"We are pleased to be part of this funding round and continue our partnership with Claroty, who has developed the leading industrial cybersecurity platform to protect and manage OT, IoT, and IIoT assets, and is now extending that expertise into healthcare to protect the XIoT.”

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