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Venture capital

LG expands VC portfolio to industrial cyber security

LG Technology Ventures participates in Claroty's latest $140 mn funding round

By Jul 26, 2021 (Gmt+09:00)

(Source: Getty Images Bank)
(Source: Getty Images Bank)

LG Technology Ventures, a venture capital arm of South Korea's LG Group, has diversified its portfolio into the industrial cybersecurity market with a recent investment in a US startup.

The California-based VC firm, with over $400 million in assets under management, has participated in the $140 million funding round for Claroty, both companies said last month. The fresh funds catapulted Claroty to unicorn status, or a startup with a valuation of over $1 billion.

LG is believed to have put about $10 million into the anti-hacking service provider in the 33rd investment for the three-year-old VC firm, according to venture capital industry sources last week.

The Series D funding was led by Bessemer Venture Partners and 40 North Ventures, bringing the company’s total funding to $235 million. Other investors include US-based I Squared Capital and all of its previous investors, including Temasek, Team8, Rockwell Automation, Siemens and Schneider Electric. 

Launched in Israel in 2015, the cybersecurity firm helps companies counter cyberattacks, which are expanding targets into critical infrastructure and supply chains on a more frequent basis than before.

According to Cybersecurity Ventures, global ransomware damage costs are predicted to exceed $265 billion by 2031, up from $20 billion in 2021

General Motors Co., Coca-Cola Co., Pfizer Inc. and Siemens AG are lsted as Claroty's clients.
(Courtesy of LG CNS)
(Courtesy of LG CNS)
In April of this year, LG Technology Ventures invested an unspecified amount in Deep Instinct, a US deep learning startup. It joined in its Series D funding round led by BlackRock. 

"Both Deep Instinct and Claroty are top-ranked unicorn companies in the cybersecurity field," said an IT industry source. "The investments could lead to their strategic tie-ups going forward."

LG Technology manages $425 million of assets on behalf of five other LG Group units -- LG Electronics Inc., LG Display Co., LG Chem Ltd., LG Uplus Corp. and LG CNS Co. It invests in early-stage startups in artificial intelligence, mobility, advanced materials, life sciences, next-generation displays, mobile and 5G, which could create synergy with LG Group's businesses. 

Since its inception in 2018, the VC firm has invested in 33 startups, including a Korean over-the-top services company Wavve. It also has committed to global VC funds, including Nautilus Venture Partners, Sierra Ventures and US Venture Partners. 

Claroty will use the new funds to beef up its services such as threat detection and risk and vulnerability management, while securing its remote access capabilities and growing its global headcount, it said in a statement.

Write to Jung-hwan Hwang at jung@hankyung.com

Yeonhee Kim edited this article.

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