Not Fundable

How about investing in a startup whose mission is to safeguard civilization?

That is exactly what Dragos does. The company protects critical infrastructure — known as operational technology (OT) — from cyber threats. OT underpins the systems we rely on every day: electric grids, water utilities, manufacturing plants, transportation networks, data centers, and other essential infrastructure. These environments require security tools specifically designed for their unique operating conditions.

When critical infrastructure fails, the consequences extend far beyond financial losses — they can disrupt communities, threaten public safety, and cost lives.

We invested in Dragos because we believed protecting critical infrastructure from cyber threats would become a necessity in an increasingly complex geopolitical environment, not an optional expense.

One factor that reinforced our conviction in Dragos was a candid conversation with Koch Ventures.

Koch is one of the largest industrial enterprises in the United States, with businesses spanning energy, chemicals, refining, manufacturing, transportation, and agriculture. During our conversation, the team explained that they had initially searched for an OT cybersecurity solution to protect their own operations. Unable to find a suitable alternative, they chose Dragos — and ultimately made it the largest investment in Koch Ventures’ portfolio.

In addition, Saudi Aramco (alongside several industrial corporate venture investors) invested in Dragos and later became its largest customer.

Validation continued to build, and last week Accenture announced the acquisition of a majority stake in Dragos at a $3.2B valuation. At the same time, it announced the acquisitions of runZero and NetRise, bringing the combined transaction value to approximately $4.2B.

The deal creates the most valuable OT cybersecurity platform ever assembled.

Led by Dragos co-founder and CEO Robert M. Lee, runZero and NetRise will operate under Dragos, which will remain an independent company focused on its mission of protecting critical infrastructure. Based in Hanover, Maryland, Dragos employs approximately 580 people and generates an estimated $160M in annual revenue.

Notably, the transaction includes governance provisions specifically designed to preserve Dragos’s autonomy and long-term focus on OT cybersecurity.

Conclusion

When Robert M. Lee first raised capital for Dragos a decade ago, he recalls being told by almost every investor he met that OT cybersecurity was not a fundable market. It was “stupid” to focus on OT. It would never work.

But for Robert, the mission came first. Protecting critical infrastructure was something that needed to be done, regardless of whether it was considered financially attractive.

It turns out it could be both: a mission worth pursuing and one of the largest cybersecurity opportunities of our time.

Fabrica Ventures shared that conviction and invested in Dragos in April 2024. Based on the announced transaction, we expect the investment to generate a return of ~5.7x and an IRR of over 100% for our investors.

Not bad for a company that many believed was not fundable.