Devices & Diagnostics, Health IT

As use of smart devices soars, startup that secures IoT devices wins $40M

The Santa Clara, California company uses both machine learning and an advanced method of examining and managing network traffic, to secure connected devices and bring order in a world of IT chaos.

A connected, interoperable world with smart devices relaying data to arm clinicians and caregivers with important insight about the person in their care is what the entire healthcare industry is working towards.

But as each connected device gets plugged into the network in a hospital or other institution, security officials in charge of protecting patient records from bad actors worry a little more. The concern is not misplaced because, in many situations, the IT departments at these organizations do not have a full grasp of each device connected to the network, said Greg Murphy, CEO of Ordr. The Santa Clara, California company uses both machine learning and an advanced method of examining and managing network traffic, to secure connected devices.

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“When we looked at the state of connected devices in the enterprise, it truly was chaos. IT organizations could not identify what devices were connected to their networks, where they were located or what they were doing.,” Murphy said in an email response to questions. “Our goal was to bring order to that chaotic environment, and by doing so, give organizations the means to secure those devices.”

On Wednesday, Murphy got a little closer to his company’s goal of bringing order to a world in chaos as Ordr announced a $40 million funding round from investors. The Series C round was co-led by Battery Ventures and Ten Eleven Ventures, with participation from a new investor, Northgate Capital. Existing investors Wing Venture Capital, Unusual Ventures, Kaiser Permanente Ventures, and Mayo Clinic also contributed. Aside from institutional investors, certain Silicon Valley entrepreneurs also invested in the round.

Including this round of investment, Ordr has raised more than $90 million. The Series C funds will be used to beef up Ordr’s marketing and partner organizations; support existing customers so that they can fully optimize the value of Ordr’s technology; and invest in innovation and R&D, Murphy explained.

The startup’s technology helps to address three main challenges faced by health organizations: what devices are on the network (be it connected medical devices or other IoT devices), what these devices are doing and how to secure them.

“Within a few hours of deployment – via a network tap or SPAN or cloud to cloud integration – Ordr automatically discovers high-fidelity information about every connected device, including make, classification, location, and application/port usage,” Murphy explained.

Next, the company scores risk level for each device on the network. This is informed by insights gained from scouring “vulnerability and manufacturing databases and threat intelligence feeds, along with integrated IDS to identify devices with active threats, exploits, vulnerabilities, FDA recalls, manufacturing recalls, weak ciphers and certificates,” Murphy said. Ordr’s technology also has the capability of identifying unknown threats by using machine learning to understand regular device behavior. So, now if the device is communicating with a malicious domain that it normally doesn’t go to, Ordr’s platform will be able to flag it.

Finally, the technology tries to automate certain proactive and reactive actions to allow good communications to continue and prevent an attack from getting worse after it happens.

“Ordr also enables reactive policies to disrupt attacks across the kill chain – including blocking traffic, terminating sessions, or quarantining compromised devices,” Murphy said.

A deployment of Ordr’s technology costs anywhere from $50,000 for a small organization with fewer devices to monitor and secure, to hundreds of thousands of dollars for larger hospitals and health systems with scores of IT environments to manage.

It goes without saying that health systems and hospitals that have a patchwork of traditional devices and connected devices, whose use is exploding, need some help in securing them. Murphy said that connected devices make up about 45% of devices in the network today and that number is only growing. Consider that growth with larger context of how the healthcare industry has been victim to debilitating ransomware attacks during the pandemic leading even the FBI to issue warnings.

Not surprisingly, the healthcare industry, continues to be Ordr’s largest user base with customers like Cleveland Clinic, Fairview Health System, and Dayton Children’s Hospital. Murphy touted the fact that the company had been named a market leader by KLAS Research in the field of IoT Security for three years in a row. But it goes without saying that the startup has competitors. They include Palo Alto Networks (following the acquisition of Zingbox), Armis, and Claroty (since it purchased Medigate).

Murphy — not unexpectedly — believes Ordr is superior to its competitors.

“The primary differentiators with Ordr are our highly accurate visibility into devices (IT, IoT, IoMT and OT) and risks, behavioral baselining of devices, and automated creation of enforcement policies across a wide ecosystem of networking and security products,” he declared. [IoMT stands for Internet of Medical Things and OT expands to Operational Technology.]

Photo: MF3d, Getty Images