This story is all about partnerships and collaboration. I started to write it yesterday morning, but then I saw a tweet, no not from the “big guy” but from PTC about the Rockwell Automation investment. I wanted to talk about the current trend of partnering.
It begins Roy Kok and DreamReports. We’ve chatted a little about how a company with a somewhat narrowly defined product and market can grow. He’s out in San Diego this week at the Rockwell Automation TechEd event. Rockwell is an important partner. All that data from IoT and analytics isn’t worth the storage if the information can’t be parsed and displayed. Enter Dream Reports. Kok assures me that there will be more partnerships in the future. It’s no doubt his best potential.
Another Rockwell Investment
Meanwhile, I had the opportunity to speak with Patrick McBride the CMO of Claroty about another Rockwell Automation investment. Once again a somewhat narrowly defined market—cyber security—using partnerships to grow. In this case, Claroty attracted $60M of Series B investment, bringing its total funding to $93 Million. He told me that the investment funds will be used to make the appropriate hires to expand sales and projects globally and to support its new partners.
The round was led by Temasek and included Rockwell Automation, Aster Capital (born out of Schneider Electric Ventures), Next47 (Siemens-backed global venture firm), Envision Ventures, and Tekfen Ventures. Original Claroty investors Bessemer Venture Partners, Team8, Innovation Endeavors, and ICV all participated in the round.
Founded in 2014 and exiting stealth mode in late 2016, this investment comes on the heels of a breakout year for Claroty capped by a 300% year-over-year growth in bookings and customer base. Claroty now has large-scale customers with production installations across six continents in nine market segments, including electric utilities, oil and gas, chemical, water, manufacturing, food and beverage, mining, and real estate (building management systems, data centers, warehouses).
“Our unparalleled investor syndicate, which includes some of the most important industrial companies in the world, is a ringing endorsement of Claroty’s technology and the progress our team has made,” said Amir Zilberstein, Claroty Co-founder and CEO. “Our mission is to protect the most critical networks on the planet and our comprehensive platform provides our customers with the capabilities they need to accomplish this vitally important task.”
This rapidly expanding cybersecurity market segment is the result of a “perfect storm” that has placed industrial networks running critical global infrastructures in the spotlight. Old and insecure industrial control networks, which used to be “air-gapped,” are now being rapidly connected to networks and exposed to a range of risks. Because of their criticality, these networks are increasingly targeted by advanced nation-state adversaries who are determined to harvest information and gain a persistent presence for potential future attacks. In 2017, industrial networks also became collateral damage in ransomware attacks like WannaCry and NotPetya costing companies billions in losses.
“A perimeter defense to cybersecurity in today’s connected world is not enough. An end-to-end approach, with solutions that provide deep visibility into operational technology and industrial control systems, is critical for the security of heavy processing environments,” said Hervé Coureil, Chief Digital Officer at Schneider Electric. “Leading the digital transformation of energy management and automation, Schneider Electric takes cybersecurity very seriously and the partnership with Claroty complements the cybersecurity layer of our IoT-enabled EcoStruxure architecture.”
“Protecting the critical automation systems our customers operate against cyberattacks remains a top priority for the company,” said Frank Kulaszewicz, SVP, Architecture & Software at Rockwell Automation. “Claroty has been a partner since 2016 and their advanced technology is a key element of our real-time threat detection and monitoring service. Our investment in Claroty is a logical extension of our ongoing strategic partnership.”
Claroty’s comprehensive cybersecurity platform provides extreme visibility into industrial networks and combines secure remote access with continuous monitoring for threats and vulnerabilities – enabling industrial control system operators to protect these important networks. The company will use investment proceeds to grow the Claroty brand globally, extend its sales and customer support footprint, and continue its rapid pace of product innovation.
T.J. Rylander, Partner at Next47, the Siemens-backed global venture firm said, “The recent increase in scale, scope, and frequency of cyberattacks on critical infrastructure has led to an uptick in demand for new solutions from companies around the world. Claroty has the team, technology, and market traction to deliver the kind of lasting impact that we are looking for at Next47.”