Nozomi Networks Raises $100 Million in Series E Funding Round to Bolster Industrial Cybersecurity

Cybersecurity firm Nozomi Networks has successfully secured $100 million in its Series E funding round, marking another significant investment in the industrial technology sector. The company, founded in November 2013, specializes in developing technology aimed at safeguarding internet-connected devices and systems crucial for the daily operations of critical infrastructure such as power grids, oil and gas facilities, manufacturing plants, and water utilities.

According to Edgard Capdevielle, President and CEO of Nozomi Networks, the increasing digitization of work environments in recent years has led to a convergence of operational technology (OT) and information technology (IT) networks. This shift has made it imperative for companies to prioritize the protection of their OT systems, especially in the wake of high-profile cyber incidents like the ransomware attack on the Colonial Pipeline in 2021, which prompted significant government action on cybersecurity.

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The Series E funding round saw participation from major industrial players such as Mitsubishi Electric and Schneider Electric, alongside previous investors like Honeywell, Johnson Controls, and Keysight Technologies. Notably, the venture arm of the U.S. Central Intelligence Agency, In-Q-Tel, has also been an investor in Nozomi Networks.

Capdevielle outlined that the funds raised will primarily be allocated towards product development and expanding the company's global sales reach. While an initial public offering (IPO) remains a secondary goal for Nozomi, Capdevielle emphasized the company's primary objective of achieving category domination within the industrial cybersecurity space.

Nozomi Networks joins a cohort of operational-technology specialists that have attracted significant funding in recent times. This includes Dragos, which completed a $74 million Series D extension round in September 2023, and Claroty, a cyber defense company that recently raised $100 million in strategic financing.

The urgency surrounding industrial cybersecurity has escalated following incidents like the Colonial Pipeline attack, prompting heightened warnings from government agencies about threats to critical infrastructure. Law enforcement and intelligence officials have highlighted record-high attempts by nation-states, including China, to breach networks. Additionally, ransomware groups are increasingly targeting industrial control systems, posing significant challenges to industries such as wastewater management.

Scott Westlake, Vice President of Strategic Innovation at Keysight, emphasized the growing complexity of cyber threats, particularly with the proliferation of connected devices and cyber-physical systems. Keysight, both an investor in and a customer of Nozomi Networks, recognizes the importance of robust cybersecurity measures in safeguarding vital industrial operations.

Nozomi Networks' latest funding round underscores the growing recognition of the importance of industrial cybersecurity and the critical role that companies like Nozomi play in protecting essential infrastructure from cyber threats.