KnowBe4 IPO

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Rebecca Cattlin
By :  ,  Former Senior Financial Writer

What is KnowBe4?

KnowBe4 is a platform for security awareness training. It’s the world’s first and largest school of online learning that tackles the issues of social engineering – the term for cyberattacks such as phishing, ransomware and fraud.

The KnowBe4 training program has over 1,000 pieces of content in it, including interactive modules, videos, games, posters and newsletters. The platform even allows users to phish their own staff to improve their awareness and security capabilities.

How does KnowBe4 make money?

KnowBe4 makes money through the sale of subscriptions to its platform. An annual subscription can cost anywhere between £500 to £2,000 depending on the package.  

As of December 2020, KnowBe4 has 37,000 customers but no single customer accounts for more than 1% of revenue.

In 2020, more than 37% of KnowBe4’s revenue came from its channel partners – third parties which sell KnowBe4’s suite of products on to other firms.

Is KnowBe4 profitable?

KnowBe4’s website says that it doesn’t ‘work with only the bottom line in mind’, which is lucky for them, considering it made a net loss of $2.4 million in 2020. It’s worth noting that this is dramatically less than its $123.3 million loss in 2019.

KnowBe4’s annual revenues were up to some $174 million in 2020 from around $120 million the previous year.

The company has stated that Covid-19 had knock-on effects to the company’s operations in 2020 due to staff working from home, switching to virtual company events and a disruption to vendors and customers.

The SEC filing did state that although KnowBe4 believes in its long-term value and growth, it doesn’t believe it will be able to sustain profitability.

What is KnowBe4’s business model?

KnowBe4’s business model is built around providing a user-friendly platform for the busy professional.

It was founded in 2010 on the principle that companies are far too reliant on technology for cybersecurity, when really its staff have a role to play too. In order to protect against these attacks – particularly in small and medium-sized companies – users can train and phish its own staff to improve their awareness and human defence over time.

The company is aiming for complete market dominance by expanding its consumer base both domestically and internationally. Although it doesn’t expect to continue growing at the same pace every year – and in fact the number of customers joining KnowBe4 each year has been falling the past three years. As a result, the company is focusing more on longer sale cycles.

KnowBe4’s growth strategy is also based on expanding its partner network, brand awareness and in-platform content.

Who are KnowBe4’s competitors?

KnowBe4’s competitors are Proofpoint, Mimecast and Cofense, according to the company itself. However, KnowBe4 argues that its model of tackling human error is far more likely to provide longer-term security than technology-centric offerings.

Who are the directors of KnowBe4?

  • Stu Sjouwerman, Founder & CEO
  • Krish Venkataraman, Co-President/CFO and Board Observer
  • Lars Letonoff, Co-President/CRO and Board Observer
  • Jeremiah Daly, Independent Board Member
  • Stephen Shanley, Independent Board Member
  • Joseph DiSabato, Independent Board Member
  • Kara Wilson, Independent Board Member
  • Gerhard Watzinger, Independent Board Member
  • Kevin Klausmeyer, Independent Board Member

What do we know about the KnowBe4 IPO?

KnowBe4 has filed an S-1 form with the SEC to hold an IPO. The date of the KnowBe4 IPO will be released once the filing has been given the go ahead.

KnowBe4 will be listing over 11 million shares of Class A Common stock on the Nasdaq under the KNBE. The price is estimated to be $17 per share. KnowBe4’s IPO valuation could be approximately $3 billion according to its SEC filing, if it reaches the capital raising goal of $201 million.

Class A common stockholders will be entitled to one vote per share and Class shareholders will have ten votes per share.

How much is KnowBe4 worth?

KnowBe4 was last valued at over $10 billion in June 2019. KnowBe4 has raised a total of approximately $393.5 million over 5 previous funding rounds. Current investors include Goldman Sachs, Kohlberg Kravis Roberts (KKR) and Elephant.

How to trade KnowBe4 shares

When KnowBe4 lists, you’ll be able to trade its shares in the same way you would any other publicly-traded company on the stock market.

In the meantime, you can trade stocks with City Index using with spreads from 0.1%. Follow these steps to start trading:

  1. Open a City Index account, or log in if you’re already a customer
  2. Search for the company you want to trade in our award-winning platform
  3. Choose your position and size, and your stop and limit levels
  4. Place the trade

Related tags: Stocks IPO Insights

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