A Coffee Break with Claroty’s CEO Yaniv Vardi
As a new member to Team8’s go-to-market team, I wanted to learn more about our cyber portfolio companies. One company in particular I was interested to learn more about – Claroty, an industrial cybersecurity company – recently raised an impressive $140M in a series D round of funding. I needed to know more. With the world shifting to a remote work model in response to the current pandemic, a great deal of new threats, technologies and business models have emerged in the cybersecurity space.
Fortunately, I was able to get some time to interview Claroty’s CEO, Yaniv Vardi. During our discussion, Yaniv shares more about Claroty’s solution, his experience as company CEO, how Claroty has managed during the pandemic, and how he sees the future growth of the company.
What is Claroty?
Claroty is the industrial cybersecurity company that is trusted by the world’s largest enterprises – including Pfizer, General Motors, and Coca-Cola EuroPacific Partners – to reveal, protect, and manage their OT, IoT, and IIoT assets. The Claroty Platform is a complete industrial cybersecurity solution that provides a full range of controls for visibility, risk and vulnerability management, threat detection, and secure remote access. With Claroty, companies can better understand their assets, detect threats, and control internal and third-party remote access, leading to improved resiliency and business continuity.
Claroty was founded in 2015 and is based in New York City, with a presence in Europe, Asia-Pacific, and Latin America. Our solutions are deployed in thousands of locations and facilities, in over 50 countries, across all seven continents. We serve hundreds of customers worldwide to ensure their assets are protected and secured across sectors ranging from food and beverage and manufacturing to mining and materials, chemicals, and automotive markets.
Why did you decide to join Claroty as CEO?
I joined Claroty after a long journey of leading different solutions for the industrial space because I truly believe that with our talent, partners, and investors, we will lead the way in the industrial cybersecurity market. The Claroty Platform offers the broadest set of security controls and unmatched operational technology (OT) protocol coverage, and our team has unmatched experience across both the cybersecurity and OT fields. It’s been an honor to lead this very talented and unique team, to continue to build upon and expand our already proven vision, and to firmly secure Claroty’s place as the industrial cybersecurity market leader.
What problem in the industry does Claroty solve? Why is this especially relevant now?
In today’s world of increasingly digitized and connected assets, industrial and critical infrastructure enterprises are integrating their previously isolated OT systems, which manage, monitor, and control industrial operations, to their information technology (IT) systems. While aimed at increasing operational efficiency and reducing costs, this means that the physical machines used to run power grids, oil pipelines, water utilities, and many other kinds of industrial sites are becoming exposed to new cybersecurity threats that they were never designed to face.
At the same time, we are witnessing a rapid increase in the frequency and impact of cyber attacks on industrial environments from threat actors seeking to exploit the digital transformation of industrial networks for financial gain and geopolitical projection of power – with real world consequences involving disruption of manufacturing operations, impacts on supply chains, and the potential to cause harm to the general public.
In order to better protect IT, OT, and other systems, it’s crucial that the industrial economy, which underlies the world’s critical manufacturing, critical infrastructure, and supply chains, maintains the resiliency to prevent, detect, and respond to these cyber attacks.
You joined Claroty at the height of the pandemic. How has COVID impacted the company?
The pandemic created an even greater need for our solutions, particularly Secure Remote Access (SRA), which provides frictionless, reliable, and highly secure remote access to OT environments. When the whole world shifted rapidly to working remotely as much as possible, industrial network administrators were on the front lines of enablement. They needed to provide online connectivity to users who typically accessed industrial control systems physically, while minimizing the substantial risks introduced by remote users.
SRA provides a single, manageable interface through which all external users can connect to the OT environment. The system enforces password management, authentication, and access control policies for remote connections and monitors and records remote sessions.
Over the past year, Claroty’s work with major pharmaceutical companies really stands out. Can you share more about how Claroty’s technology was uniquely positioned to help with the COVID-19 vaccine rollout?
We have worked closely with Pfizer to secure its COVID-19 vaccine supply chain in its race to meet unprecedented global demand, however our work together on Pfizer’s industrial cybersecurity journey began years before the pandemic.
In 2017, another pharmaceutical company Merck MSD was severely impacted by the NotPetya ransomware attack. This was a wake-up call for the wider manufacturing sector, which resulted in the Pfizer board issuing a strong directive to strengthen the security of its production systems across all manufacturing sites.
This led the company to zero in specifically on securing the OT environment and the IT and engineering organizations to begin working closely together on the program. After a series of pilots, testing out various technologies, and after extensive studies and the analysis, Pfizer selected The Claroty Platform to gain visibility into its OT environment. “We knew that we needed to have a tool that gave us full visibility into our production environment. You can’t protect what you don’t know is actually out there,” said Pfizer’s Head of Global Automation Engineering, Jim LaBonty.
When the pandemic hit, the COVID-19 vaccine of course became Pfizer’s first priority, and a close second was securing the vaccine’s production and supply chain. Having begun the industrial cybersecurity journey back in 2017, Pfizer is now in a position to fully leverage the technologies and capabilities put in place – including Claroty – to secure its scaled-up production capabilities.
What type of advice does Team8 share with you and your team to help shape the future of Claroty?
One of the best things about Team8, unlike many other investors, is that they are a true partner with whom I can speak strategically and tactically about everything. Whether it’s something on the technology front or the investment front, I can talk to them about anything. This is a killer combination to have in an investor.
Just last month, you closed another round of funding to propel Claroty’s growth. What’s next? Where do you see Claroty in two years?
The industrial cybersecurity market is at a critical juncture. In the past few months alone we have seen a significant uptick in cyber attacks against organizations that underpin the world’s critical infrastructure and supply chains – including Colonial Pipeline, JBS, and the Oldsmar, Florida water supply. According to Cybersecurity Ventures, global ransomware damage costs are predicted to exceed $265 billion by 2031, up from $20 billion in 2021. As these incidents show no signs of slowing, the massive global demand for our specific expertise and capabilities is growing larger by the day. And with our recently secured $140 million Series D financial round, we now have the financial runway we need to meet that global demand, with a proven product strategy in a hyper-growth market, with a world-class leadership team and a strong ecosystem of partners to take us there.
What’s the best piece of advice you’ve ever received or given? How does it impact the way you run Claroty?
When building and growing a company, you need to focus on bringing in the right people to have with you on the journey. People who align with the company values, understand the importance of your customers, and can be an integral part of a great, growing team. Focus on the people and the rest will fall into place.
What’s the first thing you do each morning to set your day up for success?
Have a cup of coffee! In addition to that, I always set three main priorities – three things I must get done that day. Otherwise it’s easy to spend all day being busy without doing something meaningful. Even if I don’t get to many other things, as long as I do those three, I will have made the most of my day.