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Claroty raises $400 million in Series E round to acquire Medigate

Industrial cybersecurity company Claroty secures $400 million in Series E funding, co-led by SoftBank Vision Fund 2, which brings its total funding to $635 million, “making it the most well-funded cybersecurity company in the industrial (OT), healthcare (IoMT), and enterprise IoT sectors.”

The investment will enable Claroty to acquire Medigate healthcare IoT security company that will allow it to secure all cyber-physical systems (CPS) across industrial, healthcare, and enterprise environments or the Extended Internet of Things (XIoT).

“By combining Claroty and Medigate’s deep domain expertise and specialized 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 organization,” said Yaniv Vardi, CEO of Claroty. “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.”

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The other investors in the latest round include Bessemer Venture Partners and Schneider Electric. Other investors, including ISTARI (a global cybersecurity platform established by Temasek), Team8, and Standard Investments, participated as well.

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

“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,” said Cohen of SoftBank Investment Advisers. “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.”

Securing CPS is a particularly acute challenge in the healthcare sector due to the proliferation of IoT and IoMT devices connecting to hospital networks with 82% of health systems reported experiencing an IoT cyberattack in the last 18 months. Also, beyond critical infrastructure, organizations of all kinds are increasingly reliant on CPS to run their building management systems (BMS), surveillance cameras, heating, ventilation, and air conditioning (HVAC) systems, and many other physical processes.