LatAm industrial automation, cyber needs fueling US group Nozomi

Greater enterprise spending on industrial automation and cyber protection for critical systems is driving the Latin American operations and investments of US-based Nozomi Networks, a provider of industrial and IoT security to enterprises. 

“The importance of securing critical infrastructure has increased dramatically worldwide and that includes Latin America,” global CEO Edgard Capdevielle told BNamericas. "We're targeting mild-to-aggressive growth for LatAm in 2023."

Recurring revenues in Latin America grew 51% year-on-year in the first nine months of the year, but the firm does not provide detailed financials as Nozomi is a privately owned company, Capdevielle said.

The company reports having over 82mn OT [operation technologies], IoT and IT devices monitored worldwide through 7,600 customer installations.

In Latin America, the company has around 100 major industrial corporations as clients, including multinationals and multilatinas, up to 40 of which are in Brazil, its most important market in the region, Capdevielle said.

Given the type of services it provides and economies of scale, Nozomi mostly serves very large industrial corporations, according to Capdevielle. Its operations are mostly indirect, via professional consultancies, equipment providers and channels, and resellers.

“Essentially anybody who has industrial control systems supporting automation processes is our customer in Brazil. Whether you’re producing iron, steel or in mining or electricity and oil and gas, etc., and, frankly, anybody who has these [systems] should be protecting their critical infrastructure, which is now under attack," the CEO said.

"The Colonial Pipeline [a cyber attack in 2021] changed the world for critical industrial infrastructure. Cybersecurity is not optional," he added.

Nozomi was originally founded in Europe in 2013. Three years later, Venezuela-born Capdevielle joined the firm as global CEO and relocated its headquarters from Switzerland to the US in order to support its global expansion.

One of Nozomi’s top three global customers immediately became a “government-owned gas distribution company in Mexico,” he said without revealing the name. After that, the company expanded to Central America.

Italy’s Enel was Nozomi’s first customer and continues to be one of its largest clients, following the deployment of a solution to monitor power generation plants and networks.

The company has grown with the Italian group, as the latter expanded its footprint in Latin America and worldwide. 

According to Capdevielle, Nozomi covers a “significant portion” of Enel’s global hydro generation and is now expanding services into power transmission and distribution.

Capdevielle said that the majority of the top 10 global mining companies are also Nozomi clients, as well as 70% of the leading pharma groups and 50% of oil and gas firms. Other clients include companies from the paper and pulp and auto industries.

Nozomi’s main competitors are Clarity and Dragos. 

According to Capdevielle, automation players Honeywell, ABB, Schneider Electric, Siemens, Emerson, Johnson Controls are all resellers of Nozomi technology.

The CEO also pointed out that the company does not compete with systems security providers Cisco, Palo Alto Network and Fortinet, among others.  

“They are really good at providing security for IT. Everyone that wants to provide security for OT [operational technology], ICS [industrial control systems] and IoT [internet of things] really needs solutions designed for those markets. I fundamentally believe that OT and ICS are larger than IT.”

FUNDING

In August last year, Nozomi announced a US$100mn Series-D funding round to help accelerate growth.

The round was led by Triangle Peak Partners, and also included investments from equipment, security and service providers, as well as other companies, such as Honeywell, Keysight Technologies, Porsche Ventures and Telefónica Ventures.

Building on that, in June Telefónica Tech announced the launch of a security monitoring service for OT and Internet of Things IoT environments, tapping Nozomi’s technologies.

The service includes a technological layer based on Nozomi Networks bundled with managed services provided by Telefónica Tech. 

The service is managed by teams of OT & IoT specialists present in Telefónica Tech’s global network of 11 security operations centers (SOCs), Telefónica said at the time.

Capdevielle said that Nozomi has partnerships with other telcos around the world in addition to Telefónica.