Arlington’s Shift5 Inc. says it’s seen new demand in the relatively niche area of protecting transportation and military systems from cyberattacks.
The cybersecurity company is planning on making “significant investments” in product development, hardware development and hiring to keep pace with the increased demand brought on in part because of an uptick in such attacks. A $50 million fundraising round last week will help fund those investments, said Josh Lospinoso, co-founder and CEO of the company.
Last week’s Series B raise was the company’s second in less than four months; it raised $20 million in a Series A round in October. The Series B round was led by New York’s Insight Partners, while the previous round was led by New York's 645 Ventures and included Baltimore's Squadra Ventures, private investment firm General Advance and D.C.'s First In. The cybersecurity company, which specializes in protecting transportation infrastructure and weapons systems from cyberattacks, was founded by former members of the U.S. Army Cyber Command. Lospinoso previously founded Baltimore cybersecurity company RedOwl Analytics, which was acquired by Raytheon and Forcepoint in 2017.
With the new funding, Shift5 is hiring for “product engineers, data scientists, and others who can help us expand to different verticals — including maritime, rail, aviation, defense and commercial,” Lospinoso said. “We are actively hiring for a number of roles in these areas but are also always looking for talent across all roles as we scale as a company.” Headcount at the firm has been steadily increasing. It has 65 employees, up by 200% from last year, the company said. In 2022 Lospinoso wants to at minimum match the amount of growth in headcount it had last year.
The Biden administration has taken actions to improve cybersecurity among federal government agencies, including with an executive order last year mandating new cybersecurity practices and a recent memorandum issuing timelines for certain cybersecurity measures to be taken. “Modernizing our cybersecurity defenses and protecting all federal networks is a priority for the Biden Administration,” last month’s memorandum said.
Yet there’s still a lot of work to be done. Lospinoso described Shift5’s focus as defending the “undersecured, critical set of transportation assets that have different operational needs and cybersecurity requirements.” The company focuses on operational tech, or OT, which is the hardware of transportation and weapons systems, as opposed to software. That means collecting data about braking systems, power controls, GPS and more.
Shift5’s offices occupy approximately 20,020 square feet at 1100 Wilson Blvd. in Rosslyn. As of Feb. 2, venture data firm PitchBook's estimates show the company has raised $72.5 million in total funding and is valued at $330 million. Lospinoso declined to share revenue for the company but said it’s profitable and “experiencing organic growth.”
