You might not have known about KnowBe4 before, but you should now, because this morning the company announced a massive $300 million investment led by private equity firm KKR. The deal is based on a $1 billion valuation. Existing investors Elephant and TenEleven Ventures also participated in the round.
The massive influx of cash comes on top of a $50 million round in March, also led by KKR. They really, really like this company. Today’s investment brings the total raised to $393 million, which is a fair amount of money for a company that helps train employees to recognize phishing emails.
KKR director Stephen Shanley says his company sees a lot of potential for KnowBe4 as a market leader in this space. “The business is delivering a best-in-class product, over $100 million of recurring revenue, near triple digit growth that is accelerating, and profitability — a rare combination of qualities we see in businesses at this stage. We see a huge opportunity for the business in both its current markets and in its international roll out strategy,” Shanley told TechCrunch.
You would think it’s a solved problem, or at least a smaller problem, but the phishing attempts grow ever more sophisticated, and the method still works, or we wouldn’t still see so much of it. What companies like KnowBe4 do is allow a company’s security staff to send out tests to employees. These are harmless attempts at phishing, but which are designed to see if you react or report the attempt. Ideally you would do the latter, or at least learn a valuable lesson if you fall for it.
“Threats like phishing, ransomware and other forms of social engineering continue to plague organizations of all sizes, meaning the market for our security awareness training is growing at a rapid pace,” company founder and CEO Stu Sjouwerman said in a statement.
The new funding should help push that further, and private equity investors also often look for ways to buy companies with adjacent kinds of services to build a platform of offerings. With this kind of money in the bank, it would appear to be poised to have the option of doing that if that’s the direction it chooses to go. For now, KKR’s Shanley sees other uses for the money.
“As demand for cybersecurity products continues to increase we believe KnowBe4 is serving an important market need. A big part of what we’ll be able to help KnowBe4 do is expand internationally and help them evolve in the next stage of their growth,” he said.