KnowBe4 reaches 'unicorn' status with $1 billion valuation

CLEARWATER — Home-grown cybersecurity company KnowBe4 announced Wednesday that it has raised another $300 million for its overseas expansion initiatives and along the way achieved the tech world's highly prized "unicorn" status with a valuation of $1 billion.

The latest investment is being led by private equity giant KKR, which in March said that it and TenEleven Venture would invest up to $50 million in KnowBe4's fast-growing business of helping clients correct weaknesses in the way their employees recognize, evaluate and react to hackers' attempts to trick them into giving up access to private digital systems.

"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 founder and chief executive officer Stu Sjouwerman said in an announcement of the investment.

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KnowBe4 says it works with clients to create "an educated human firewall" that can spot and avoid traps like "phishing," in which intruders try to get employees to click on a malicious link in an email that appears to be from a trusted sender, "pretexting," in which scammers use deception to get employees to give up passwords and other critical security information.

"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," Sjouwerman said. "The relationship we started with KKR earlier this year has been fruitful for both of us. This new round enables KnowBe4 to continue to focus on helping our clients build a human shield against cyber threats, while also accelerating KnowBe4's roll out in new markets to help more companies around the globe."

Founded in 2010, KnowBe4 has grown explosively. It has 740 employees, 650 of them at its headquarters in downtown Clearwater, and offices in England, the Netherlands, Germany, South Africa and Singapore. Hacker-turned-security expert Kevin Mitnick helped design KnowBe4's training to raise awareness of traps like ransomware and CEO fraud. The company says it has recurring revenue of $100 million and a customer base of more than 25,000 organizations, most of them in North America and many in finance, health care, energy, government and insurance.

This year, KnowBe4 expanded its footprint by acquiring Brazilian cybersecurity company El Pescador and Norway's CLTRe. The company says the new $300 million investment, which includes significant participation from existing investors Elephant and TenEleven Ventures, will go into developing its platform and complementing those recent acquisitions abroad.

"Cyber threats are not going to be solved with technology alone," KKR principal Patrick Devine said. "The human side of the equation matters, and KnowBe4 is making important contributions in this area. We're very excited to watch the company continue to scale globally and meet market demand for security awareness training and testing that actually works."