KnowBe4 reportedly is preparing for a U.S. initial public offering (IPO) valued at more than $2 billion.

According to Reuters, KnowBe4 is planning the IPO, citing people familiar with the matter. The company has engaged investment banks to help with preparations for the IPO. It could come later this year or early next year, the sources said.

KnowBe4 isn’t commenting.

Rik Turner is principal analyst at Omdia. He said a KnowBe4 IPO could be interesting and logical.

KnowBe4 might still face an uphill battle to expand its customer base even after the IPO, he said. But the move will “certainly raise its profile significantly.”

And it may even put it on the radar of larger players, Turner said. They may want to add products for awareness training to their portfolio through a partnership.

Last year, KnowBe4 got a $300 million investment led by global investment firm KKR, with significant participation from existing investors Elephant and TenEleven Ventures. The investment raised the company’s value to $1 billion.

KnowBe4 planned to use the funding for global growth initiatives and platform development.

Email Security Market Changing

Turner said the whole email security awareness training market segment has undergone considerable change. For instance, Proofpoint acquired Wombat.. Also, PhishMe went private and changed its name to Cofense.

Cofense still offers awareness training and reporting. But it removed “phish” from its name to move to a broader email security offering, he said.

Omdia’s Rik Turner

“Meanwhile, one of Proofpoint’s most important competitors in email security – Mimecast – also bought a smaller awareness training vendor, Ataata,” Turner said. “All this activity raised the question in analysts’ minds whether awareness training technology was really destined to be a standalone business, or would ultimately become a branch of the products/services offered by broader security players, and particularly those offering email security in the form of secure email gateways like Proofpoint and Mimecast.”

Cashing In

Through all this, KnowBe4 has remained a dedicated provider of email security awareness training technology, Turner said. With the IPO, KnowBe4 likely hopes to cash in on the heightened concern for security generally, and email security in particular. The pandemic and the move to work from home has intensified this concern.

“My take on the awareness training market is that it is not really a technology sector at all, but rather a media market,” he said. “Vendors compete on the excellence of their content, i.e. the films, how engaging they are and how well they promote involvement from the trainees. Some companies even use Hollywood writers to script them.”