Phishing Simulation Vendor KnowBe4 Raises $300M To Grow Globally

Security awareness training provider KnowBe4 has more than $100 million of recurring revenue, a valuation of $1 billion, and is No. 96 on Inc. magazine’s list of the 500 fastest-growing private companies.

Security awareness training vendor KnowBe4 has received a $300 million investment from private equity giant KKR to pursue global growth initiatives and platform development.

The Clearwater, Fla.-based simulated phishing platform provider said the investment will help KnowBe4 build a human shield for clients against cyber threats and accelerate its rollout in new markets to help more companies around the globe. The new infusion of funds has resulted in a $1 billion valuation for KnowBe4, minting it as cybersecurity's newest unicorn.

"We built KnowBe4 to serve an important market need and it's very, very gratifying to have reached this milestone as evidence that we're doing what we set out to do," KnowBe4 CEO Stu Sjouwerman said in a statement. "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 platform is growing at a rapid pace."

[Related: Kaseya Buys ID Agent To Strengthen Dark Web Monitoring Muscle]

KnowBe4 has more than $100 million of recurring revenue and a customer base of more than 25,000 organizations across finance, healthcare, energy, government and insurance sectors. The company was No. 96 on the 2018 Inc. 500 list, which tracks the fastest-growing private companies in America, with 3,726 percent revenue growth from 2014 to 2017.

The company was founded in 2010, employs 642 people, and has now raised $393.5 million in five rounds of outside funding. The $300 million C-1 round comes just three months after KnowBe4 raised $50 million in a Series C round also led by KKR.

"2019 is on track to be another record year for KnowBe4, which is experiencing accelerating growth at significant scale," KKR Director Stephen Shanley said in a statement. "We see KnowBe4 as a category-defining asset driving significant impact within a critical vertical of cyber security and are very excited to extend our support in this new round of financing."

The massive funding round comes just a month after KnowBe4 bought Norwegian security culture specialist CLTRe and four months after the purchase of Brazilian security awareness training and phishing simulation provider El Pescador. All told, KnowBe4 has made five acquisitions over the past 20 months, according to CrunchBase.

KnowBe4 said its platform can help businesses reduce risk and support their traditional IT security investments by creating an educated human firewall. The company said its security awareness training is specifically designed to raise awareness of ransomware, CEO fraud and other social engineering tactics.

"Cyber threats are not going to be solved with technology alone," KKR Principal Patrick Devine said in a statement. "The human side of the equation matters, and KnowBe4 is making important contributions in this area."

The $300 million investment was made through KKR's Next Generation Technology Fund, which focuses on investments in software, security, Internet, digital media, and information services. In addition to KnowBe4, KKR has held a stake in cybersecurity vendors Cylance, Darktrace, and ForgeRock, as well as solution provider giants Optiv and SoftwareONE.

KKR's investment comes after four of KnowBe4's competitors were acquired with endpoint security vendor Webroot buying the assets of Securecast in August 2017, Proofpoint purchasing Wombat Security Technologies for $225 million in February 2018, Mimecast buying startup Ataata in July 2018, and Kaseya purchasing startup ID Agent last month.