Medical Device Security Company Medigate Raises $15M

Medigate, a medical device security company, has raised $15 million in its quest to secure what has perhaps become healthcare’s greatest area of vulnerability: the Internet of Medical Things (IoMT).

New investor U.S. Venture Partners (USVP) led the Series A financing round, earning partner Jacques Benkoski a seat on Medigate’s board of directors. YL Ventures and Blumberg Capital also contributed to the funding round.

>> READ: How to Create an IoMT Cybersecurity Strategy that Works

Medigate said it intends to use the money to expand its commercial footprint by tripling the number of research and development, market, sales and customer service employees over the next year and a half.

“Working with USVP and our initial investors, YL Ventures and Blumberg Capital, we are poised for rapid expansion by helping our customers confront the unique security risks and management challenges associated with connecting medical devices to clinical networks,” Medigate CEO Jonathan Langer said today in a statement.

Now is indeed a trying time for healthcare providers, medical device makers and the patients who depend on them.

Most healthcare executives don’t trust their medical device cybersecurity strategies to fend off cyberattacks, protect patient data and prevent disruptions in care delivery, a survey last year found. Horror stories include rogue Raspberry Pi computers connecting to IoMT devices and harvesting data, hospital shutdowns affecting or even halting patient care, and more. The U.S. Food and Drug Administration has even made medical device security a priority in its plans to smooth the digital transformation.

But these medical device security challenges also make this moment a potentially lucrative time for cybersecurity companies. What was once a component of a cybersecurity business has now become the backbone of companies like Medigate, Cynerio and others. Their work, they say, is complex — and critical to patient safety, especially in a largely underserved market.

And it turns out that investors are beginning to see potential in the chaos.

“With regulators appropriately taking a hard look at medical device security and the sheer growth in the number of devices being added to already complex clinical networks,” USVP general partner Jonathan Root, M.D., said in a statement, “we believe Medigate has a significant opportunity to advance its growth trajectory and capture the market.”

Here’s how the Medigate platform works: It catalogues each medical device with tags regarding IP address, type, vendor and model. The medical device and asset management tool also gathers domain-specific data and understands how these devices operate in the clinic, enabling smart detection of security threats, according to the company.

Before today’s financing news, Medigate raised $5.4 million in seed funding in November 2017, for a lifetime total of $20.4 million. Now, however, comes a question: Will capital raised help translate to lives saved?

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