How Medigate is Curing Healthcare Cybersecurity

Earlier today, healthcare cybersecurity pioneer and YL Ventures portfolio company, Medigate announced an impressive $15 million Series A raise led by respected Silicon Valley venture capital firm U.S. Venture Partners, with participation by current investors YL Ventures and Blumberg Capital. USVP has previously backed iconic cybersecurity leaders Check Point Software, Imperva and Trusteer, among others. Jacques Benkoski, Partner at USVP, spearheaded this very successful round, and we are thrilled to welcome him to Medigate’s board of directors.

Following a $5.4 million seed round led by YL Ventures just over a year ago, Medigate has more than delivered on its ambitious promise to cure healthcare cybersecurity, with phenomenally successful first-year sales and growth. Co-founders Jonathan Langer (CEO), Itay Kirshenbaum (CTO) and Pini Pinhasov (CPO) have exceeded all our (high!) expectations with their flawless execution across product development, marketing, sales, and especially customer success. Medigate now works with dozens of U.S. hospitals, ensuring the security of tens of thousands of critical medical devices.

Medigate’s robust performance and stellar executive team have reached such heights in large part due to the explosive potential of the market they’ve identified and the robust quality of the team and product they’ve built to address that need.

Healthcare Cybersecurity in “Critical Condition”

The global healthcare IoT market is expected to grow with a 12.5% CAGR to $136 billion by 2021. However, this growing market faces a growing threat. Healthcare breaches have spiked significantly since 2010 and healthcare delivery organizations (HDOs) were the fastest growing targeted group, accounting for over 70% of the 2,149 breaches tracked. HDOs were also the victim of 88% of all ransomware attacks in U.S. industries last year and 89% of studied organizations had a breach.

The healthcare industry appears aware of the threat but has been slow to act. While 67% of device manufacturers and 56% of HDOs believe an attack on one or more of their medical devices is likely, just 17% of manufacturers and 15% of HDOs are taking significant steps to prevent such attacks. These facts are cause for alarm. In June 2017, a congressional task force “Report on Improving Cybersecurity in the Healthcare Industry” gave the following diagnosis: “Healthcare cybersecurity is in critical condition.”

Healthcare cybersecurity struggles because generalized enterprise IoT security solutions cannot keep up. Medical devices’ opaque systems, proprietary protocols and complex interactions make them far harder to account for and secure than enterprise IoT devices. In order to achieve even basic visibility, a healthcare IoT solution must be able to identify each connected device with great granularity (including manufacturer protocols) and provide up-to-date information on risk ranking, device utilization, software maintenance, and compliance data. Solving this problem presents a significant challenge—the Medigate team has all but overcome in just over a year since initial seed investment.

How Medigate Cures Healthcare Cyber Security

Medigate’s turnkey solution for securing healthcare IoT devices overcomes the myriad challenges facing the industry by addressing their root causes. The Medigate platform identifies, fingerprints and tags each medical device beyond the device’s IP address with labels based on its type, vendor and model. Unlike general enterprise IoT solutions, Medigate’s approach builds security and device-management right into the network by accounting for unique medical device protocols and remaining continually current with clinical and regulatory information.

The rapid adoption and growth of Medigate is a testament to the value and quality of the product this truly exceptional team has built. Medigate’s core technology is world-class, and its brilliant strategic application has allowed them to quickly out-innovate their peers in the market. What’s more, Medigate is not merely a cyber solution. By granting superior device visibility, it also helps hospitals manage their equipment more efficiently, benefiting multiple departments and improving their bottom line. Recent, promising partnerships with Palo Alto Networks and other large technology providers only bolster Medigate’s considerable momentum.

Most impressive though, has been the overwhelming customer reception to the Medigate platform. Over the course of the last year, Jonathan and his team exceeded our expectations in securing a portfolio of strategic customers, including many top hospitals and healthcare systems in the U.S. With their existing customer base and dozens of proof of concepts (PoC) in progress, Medigate only has room to grow. It is remarkable for such a young team to win the business of such large organizations, and it signals much more potential to come.

Betting on Medigate’s Promising Future

When YL Ventures led Medigate’s seed round last year, we believed in the team and the mission and felt confident they could execute. Announcing our participation today in this impressive A round, we see Medigate’s incredible potential being actively realized and are excited to help continue fueling their runaway growth.

We are proud to reaffirm our faith in Jonathan, Itay, and Pini as leaders and Blumberg Capital as co-investors, and are honored to have USVP and Jacques Benkowski lead the way on this ambitious follow-on investment. Just over a year ago, healthcare cybersecurity was in critical condition, but today Medigate’s vital signs are strong, and thanks to it the future ahead looks healthy indeed!