Business / Cybersecurity / Funding / Investing

Industrial cybersecurity firm Dragos raises $200M Series D, reaches unicorn status with $1.7B valuation

The Hanover-based company is growing around the globe as more companies and states seek cybersecurity for industrial control systems and critical infrastructure. Going public is in the future plans.

Inside Dragos' offices. (Courtesy photo)
Maryland’s cybersecurity community has a unicorn.

Hanover-based industrial cybersecurity company Dragos said Thursday that it raised $200 million in a Series D round. The company raised the round at a $1.7 billion post-money valuation, meaning it has reached the tech “unicorn” status of a private company that’s valued at over $1 billion.

Dragos specializes in cybersecurity of the industrial control systems and operational technology environments that power critical infrastructure like water and electric, as well as industries like oil and gas, chemical, pharmaceuticals and manufacturing. It has expanded globally since being founded in Maryland by a trio of cybersecurity professionals from the intelligence community in 2016. There has been even more interest this year, with high profile attacks against the Colonial Pipeline and the Oldsmar, Florida water system, and President Joe Biden highlighting the importance of industrial control systems cybersecurity.

“We’ve seen significantly increasing customer traction,” Dragos CFO Darren Sankbeil told “It’s been strong in several areas historically and now with some of the events in the marketplace, we’re seeing a much broader interest into new areas like gas pipelines and water.”

Overall, year-over-year growth in annual recurring revenue has been 100% for the period ending Sept. 30, the company said. It’s a mix of renewing customers and new business from additional industries and areas of the world interested in the products and services the company offers.

We decided it's the right time to take the money to accelerate our growth commensurate with what we're seeing in terms of customer traction.

Dragos wasn’t planning to raise. The company was well-funded for the year after raising $110 million in a Series C round last December. But that expanded interest led to investors reaching out, as well. Typically, with a funding round, a company goes to the investors.

“The investors actually came to us given our leadership in the space and the traction they see us getting in the space,” said Sankbeil. “We decided it’s the right time to take the money to accelerate our growth commensurate with what we’re seeing in terms of customer traction.”

Investors in the round included Koch Disruptive Technologies, an investment arm of Koch Industries, and funds and accounts managed by global asset management firm BlackRock. Also participating in the round were Emerson, Hewlett Packard Enterprise, AllegisCyber, Canaan, DataTribe, Energy Impact Partners, National Grid Partners, Schweitzer Engineering Labs, Global Reserve Group and Rockwell Automation.

The company is planning to grow across its operations, and the funding will also help it to support events, education and community networking opportunities. In addition to Hanover, it has operations in Australia, the Middle East, the U.K., and employees around the U.S. But Sankbeil said the 376-member team is a “proud Baltimore-based company” and will continue to expand here.

“As the company grows I fully expect what we do in the Baltimore area will continue to grow equally to the business as a whole,” he said.

Today, Dragos is marking its unicorn status — the only industrial cybersecurity company to reach that milestone, by the company’s count. But it also has an eye on further growth. Going public could be in the company’s future. It’s a move that Sankbeil said is “definitely in our sights” as it continues to expand.

“We think it’s the best interest of our customers for us to remain independent to continue to develop the products and services that best meet our clients’ needs,” he said. “We think the best way to do that is to stay independent to grow the business, and usually the logical next step as you grow and require additional capital is eventually to go to the public markets.”

Dragos CEO Robert M. Lee (Courtesy photo)

Sankbeil added that going public is not an “end in itself,” but offers a path to best deliver on its mission.

It has been an explosive rise for a company that has been based in Maryland from the start. Cofounders Robert M. Lee, Jon Lavender and Justin Cavinee started with support from DataTribe, the Fulton-based cyber foundry that invests in and builds companies with founders out of the federal agencies and intelligence community hubs clustered in the region. With this level of growth for one of its companies and exits for three others this year, leaders see a cycle that can build on itself.

“The continued outstanding growth of Dragos is a great demonstration of the health of the cyber startup ecosystem in Maryland,” said DataTribe Managing Director John Funge. “There is a uniquely deep pool of cybersecurity talent in this region — experts in the intelligence community working on truly over-the-horizon innovations. It’s that talent that makes Maryland such a great place to start cybersecurity companies. Looking forward, we’ll see other successes such as Dragos in Maryland. These successes will continue to fuel the ecosystem as successful entrepreneurs invest in and support other entrepreneurs.”

According to data provided by Pitchbook to in July 2020 and the funding rounds that have been reported since, it appears to be the second-largest amount of venture funding raised in a round in the Baltimore area over the last decade. Only Columbia-based Tenable’s $250 million round in 2015 ranks higher, dollars-wise. That company has since gone public. It puts Dragos in rare company that makes other local founders consider what’s possible.

“The Dragos raise is very inspirational to any entrepreneur seeking to help defend the nation’s cyberspace, including Maryland cybersecurity startups,” said Ron Gula, cofounder of Gula Tech Adventures and former Tenable CEO. “There is a very short list of ex-NSA cybersecurity founders who have created $1B+ valued companies and I’m thrilled to see another one. Companies like Dragos are also great for the Maryland economy and employ both cyber and non-cyber talent.”

Companies: DataTribe / Dragos
People: Ron Gula

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