Several other names in phishing/email security training have been acquired already.

Edward Gately, Senior News Editor

March 22, 2021

3 Min Read

With heightened awareness of email security threats due to the pandemic, KnowBe4 going public is a smart move.

That’s according to Rik Turner, Omdia’s principal analyst of cybersecurity. KnowBe4 wants to raise up to $100 million through an initial public offering (IPO) in the United States, according to a regulatory filing.

KnowBe4 didn’t reveal the number of shares it would offer or the pricing.

The company isn’t commenting further on its IPO. Talk of KnowBe4 planning an IPO started last fall.

No Specific Plans for Proceeds

Its its filing, KnowBe4 said it has “no specific plans for the use of a significant portion of the net proceeds of this offering.”

“However, we anticipate that we will use the net proceeds from this offering for general corporate purposes, which may include working capital, capital expenditures, other corporate expenses and acquisitions of complementary products, technologies or businesses,” it said. “We currently have no agreements or commitments with respect to acquisitions of complementary products, technologies or businesses. The timing and amount of our actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of our business. Accordingly, our management will have broad discretion in applying the net proceeds from this offering. And investors will be relying on the judgment of our management regarding the application of the net proceeds from this offering. Pending these uses, we intend to invest the net proceeds of this offering primarily in short-term, investment-grade, interest-bearing instruments.”

Keep up with the latest channel-impacting mergers and acquisitions in our M&A roundup.

Turner said KnowBe4 going public is an interesting move.


Omdia’s Rik Turner

“Given heightened awareness of email security thanks to the pandemic, what with the never-ending upswing in ransomware, there has probably never been a better moment for a phishing/email security training company to attempt a flotation,” he said. “Their venture capitalists (VCs) have no doubt noted that fact and are seizing the opportunity. They appear to have a respectable customer and revenue base, even though they aren’t yet actually profitable.”

Vendors Acquiring Security Training Providers

The other exit for the VCs would have been an acquisition, Turner said. But several other names in phishing/email security training have been acquired already, usually by a secure email gateway (SEG) vendor. For example, Wombat was acquired by Proofpoint.

“Segment creator and leader PhishMe, by contrast, was taken out by private equity and rebranded as Cofense, which is an inferior name, but I guess they had to do it because they wanted to show that they were doing more than just phishing training,” he said.

In recent years, standalone training platform vendors have been disappearing into the “belly” of larger entities who offered a broader portfolio of email security technology, Turner said.

“So maybe KnowBe4 wants to raise its profile with an IPO with a view to itself becoming a broader player, perhaps through M&A,” he said.

Earlier this month, KnowBe4 announced it is acquiring MediaPro, a security and privacy training solutions company. It will help KnowBe4 expand in the security awareness training market.

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About the Author(s)

Edward Gately

Senior News Editor, Channel Futures

As news editor, Edward Gately covers cybersecurity, new channel programs and program changes, M&A and other IT channel trends. Prior to Informa, he spent 26 years as a newspaper journalist in Texas, Louisiana and Arizona.

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