ICS-focused cybersecurity startup Dragos raises $10M to protect electric grid

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Critical infrastructure-focused cybersecurity firm Dragos, Inc. has raised a $10 million Series A funding round from a group of prominent investors in order to expand the company and develop new technologies.

The Series A round is led by two traditional venture capital firms, Energy Impact Partners and Allegis Capital, and a Maryland-based startup development studio named DataTribe. Allegis Capital is a major backer of DataTribe, which is structured to help mentor former U.S. intelligence officials to become successful business executives. Energy Impact Partners and Allegis Capital accounted for $8 million of the total $10 million round, while DataTribe offered $1 million. The remaining, roughly $1 million of the Series A round will be filled by a cohort of outside investors.

Dragos sells a digital platform, which can be deployed either on-premise or via the cloud, that allows for analysts to gain a better understanding of the internet traffic flowing between front office computers and internet-connected industrial machinery used by manufacturing and energy sectors. The product works by scanning, flagging and blocking potentially malicious online activity.

In recent months, Dragos secured business partnerships with professional services firm Deloitte and cybersecurity company CrowdStrike. These arrangements have resulted in Dragos’ technology being integrated into other, outside product offerings.

Founded by three former U.S. intelligence analysts who previously investigated real world cyberattacks on critical infrastructure, Dragos until recently remained a largely self-funded operation. The fresh funding will allow for the Maryland-based firm to grow from both a workforce and revenue standpoint.

Although the company’s identity is rooted in the U.S. intelligence community — largely from the NSA — Dragos’ CEO Robert Lee has said he does not plan to bid on U.S. government contracts in order to “avoid any conflicts of interest,” according to Forbes. Lee, who occasionally advises lawmakers and staffers on Capitol Hill about emerging cyber threats facing the energy grid, hopes that geography will not be a limiting factor for Dragos as it seeks new customers.

Critical infrastructure is an established term used by the U.S. government to define 16 different business sectors “whose assets, systems, and networks, whether physical or virtual, are considered so vital to the United States,” according to the Department of Homeland Security. The designation applies to the chemical, communications, dams and nuclear infrastructure sectors, among others.

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