Cybersecurity startup Nozomi Networks nets $100m in pre-IPO funding to protect critical infrastructure

Nozomi Networks, a San Francisco-based industrial CyberTech startup offering cybersecurity and operational visibility services for industrial control systems, raised $100m in pre-initial public listing funding.

The Series D funding round was led by Triangle Peak Partners, with participation from Forward Investments, Honeywell Ventures, Keysight Technologies, Porsche Digital, Telefónica Ventures, the U.S. government-affiliated In-Q-Tel, and others. To date, the company has raised $154m, with the previous round being $30m in September 2019.

The company will use the capital to help scale its product development initiatives as well as its go-to-market approach globally. Specifically, Nozomi will expand its sales, marketing, and partner enablement efforts and enhance its products to address new challenges in operational technology and internet of things (IoT) security markets.

Founded in 2013, Nozomi Networks’ ICS system providers real-time visibility to manage cybersecurity risk and improve industrial operations resilience. Its software monitors machines, including valves and pipelines, to see if there are any anomalies and then alerts companies about where urgent fixes are needed to protect the facilities from hackers. The software also tracks down the different machines and devices that are connected to the internet to monitor them.

Nozomi Networks’ customers gain advanced cybersecurity, improved operational reliability and IT/OT integration. With customers in sectors such as oil, gas, and water, energy, manufacturing, mining, transportation and utilities, Nozomi Networks has seen strong growth as cyberattacks on critical infrastructure continue to grow.

Nozomi’s latest funding round comes off the back of a year in which it claims to have doubled its customer base and increased annual recurring revenue by 110%. It says its solutions monitor more than 47 million OT, IoT and IT devices globally.

The diverse range of investors is said to reflect interest by Nozomi Networks’ customers to invest in the company, among them car maker Porsche AG. “Digitalization is changing and disrupting entire industries, including the automotive sector,” Stephan Baral, head of Porsche Ventures Region U.S., said in a statement. “Cybersecurity is playing a crucial and growing role for all companies and their internal processes and production facilities as cyber-attacks have become a serious threat.”

The importance of industrial machines to the economy has made them a lucrative target for ransomware gangs, with the Colonial Pipeline and JBS attackers stealing $4.4m and $11m in ransom payments, respectively. Research published by Nozomi last month showed vulnerabilities in the critical manufacturing sector rose by 148% in the first half of 2021.

Nozomi CEO Edgard Capdevielle said, “The number of attacks has more than doubled year on year,” based on what his company is seeing in the industrial cybersecurity field. We’ve gone from having a malicious insider here and there, somebody that didn’t like how he or she got fired, to now these ransomware folks that want to shut you down.”

The company competes with the likes of Claroty and Dragos in the industrial cybersecurity market.

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