As we enter the new year, I wanted to look back at the business achievements of the previous year and share highlights with our various audiences in the industry. Coming out of 2018, the need for better security in the OT environment has never been more urgent, and as Claroty has emerged as the leader in this space, the opportunity for us to make a real difference has never been more clear or more exciting. We're off to a great start already, with our sponsorship and participation in last week's S4x19 event and winning the title in the capture-the-flag competition. So, with that, I’d like to share a few of Claroty's highlights from 2018:
Having come out of stealth in 2016, Claroty has been in a state of constant growth and last year was no exception. In 2018, we experienced a year of record-setting revenue and bookings, garnered recognition from some of the industry’s most prominent influencers, and we secured the largest round of funding ever in our industry segment, which will help fuel our innovation and growth for years to come. None of that matters however if we are not delivering on our mission of helping our customers ensure the safe and reliable operation of the world’s most critical infrastructures. To that end, we released a new product and several critical new features that are making a real difference in protecting our customers’ ICS networks. We also launched our global partner program and added several world-class channel and integration partners to our ecosystem.
A Year of Record Growth
Claroty doubled the number of deals won year-over-year, also increasing our bookings by nearly 100% year-over-year. This was primarily driven by new business from direct sales and contributions from our expanded network of channel partners. We added new production installations in the oil & gas, power & energy, automotive, aerospace, mining, food & beverage, transportation, pharmaceutical, and water & waste vertical markets. We now have customers in 11 vertical markets across 6 continents.
To keep pace with this growth, we added new employees steadily throughout the year. Increasing our headcount by 60% over 2017, we now have employees in 8 countries around the globe. Among these hires were 2 additions to our executive team: Dave Weinstein, former CTO of the State of New Jersey, joined us as VP of Threat Research, and Jonathan Shapira joined us as General Council from Cybereason.
Industrial Automation Providers/Operators Invest in Claroty
One of our most significant events of the year occurred in June when we announced a US$60 million Series B investment round with an unprecedented syndicate of investors including industrial operators, control system vendors and venture capital leaders from around the globe. The round was led by Temasek and includes Rockwell Automation, Schneider Electric, Next47 (Siemens-backed global venture firm), BMW iVentures (the venture arm of BMW Group), Evergy Ventures (investment affiliate of Evergy, Inc.), Envision Ventures, and Tekfen Ventures. Original Claroty investors Bessemer Venture Partners, Team8, Innovation Endeavors, and ICV also increased their investment by participating in the round.
The funding is meaningful for a couple of reasons. First, the pedigree of the syndicate who chose to invest in our company includes three of the world’s most prominent industrial control system vendors as well as large industrial operators who understand the rising threat to their ICS networks. This collection of investors is unprecedented in our market. Secondly, the investment enables us to accelerate our business growth and technical innovation. As a result of the funding, we have increased investment in product development, threat research and our global sales and support presence.
New Products, Enhancements and Integrations Introduced
Our momentum last year was also bolstered by the release of several major upgrades to the Claroty Platform. Early in the year, we introduced Security Posture Assessment (SPA), a new product enabling consulting and security teams to conduct a quick, but comprehensive, assessment of a plant or operational environment. With this release, we also introduced proactive vulnerability and network hygiene monitoring in our Continuous Threat Detection product. This alerts customers to known vulnerabilities and network configuration issues within their environment.
Later in the year, we introduced a true game-changer in terms of network risk reduction. Our virtual zones and network segmentation feature greatly reduces the time and complexity of implementing network segmentation (one of the most impactful steps an organization can take to reduce security risk) by automatically creating “virtual zones”; that is, groups of devices that are supposed to be communicating with each other based on observed behavioral patterns. The system also updates these zones as new devices are added to the network, generates alert policies for communications between assets, highlights alerts generated because of potentially dangerous communications across zones, and provides a network map to accelerate physical segmentation efforts.
In December, we released our new “multispectral data acquisition” engine, a ground-breaking new approach to data collection that provides nearly 100% visibility into all the assets in the OT network environment, what they are, what function they perform, configuration information, how the assets are communicating in the network and specific details about the application-level (layer 7) process automation “conversations”.
We also announced several integrations with our technology partners, enabling Claroty customers to better leverage the investments they’ve already made in technology process development and training. Our integrations now include:
- Network Infrastructure (Cisco, Siemens, Palo Alto, CheckPoint)
- Network Access Control (ForeScout, Cisco)
- SIEM & Analytics (Splunk, IBM QRadar, RSA)
- Endpoint Detection and Remediation (EDR) (TripWire)
Claroty Vision Partner Program and New Channel Partners
In the Spring, we unveiled Claroty Vision, our global channel partner program to provide integrated solution partners, managed service providers (MSPs), and resellers with the tools and training they need to meet the global demand for Claroty’s OT security solutions. Along with the program itself, we introduced several new channel partners including KPMG Argentina, Dimension Data/NTT Security, Optiv, and OYLO. These partners add to the stable of previously announced relationships with Siemens, Rockwell Automation, Schneider Electric, Kudelski Security, and Leidos.
We were very fortunate in 2018 to receive recognition, both for our technology and for our business momentum, from the industry press and analysts. Some of these included:
- S4 Threat Detection Challenge- Claroty won the Identification and Detection stages and the overall competition.
- Sinet 16 Innovator: Selected as one of 16 winners from a pool of over 120 companies
- Wall Street Journal: Tech Companies to Watch 2018
- Frost and Sullivan: Entrepreneurial Company of the Year
- CIO: 10 Hot IoT Startups to Watch
- Globes: Top 10 Promising Startups
- DarkReading: 20 Cybersecurity Firms to Watch
- CRN: Emerging Vendors 2018, Top IoT StartUps of 2018
- eSecurityPlanet: 20 Cyber Security Startups to Watch in 2018
- The Innovator: Startup of the Week
I share these highlights so I can say thank you on behalf of the company. We appreciate every one of our customers who’ve trusted us to help keep their business safe, and those who have supported us in various ways over the last year. There is still so much to do, and we couldn’t be more excited about the opportunities ahead of us.