KnowBe4, a fast-growing security awareness training and phishing simulation provider, announced they have closed on a $30 million Series B investment led by Goldman Sachs. The funding comes on the heels of 18 consecutive quarters of growth, which resulted in the company landing at No. 231 on the Inc. 5000 annual ranking of the fastest-growing private companies in America.
Kevin Mitnick, an internationally recognized computer security expert and KnowBe4’s chief hacking officer — often referred to as the world’s most famous hacker — helped design KnowBe4’s cybersecurity training.
Cyber threats and need for employee training continue to grow
Helping organizations combat the burgeoning ransomware threat by training their employees is a huge market opportunity.
A whopping 91 percent of cyber attacks and the resulting data breaches begin with a spearphishing email, according to numerous sources. KnowBe4 states that this conclusively shows end users really are the weak link in IT security.
A growing percentage of phishing emails, when clicked by users, inject ransomware into computers and mobile devices.
Further, global ransomware damage costs are predicted to exceed $5 billion in 2017, up from $325 million in 2015 — 15x in just two years. And the impact is expected to worsen, especially for healthcare organizations, which have been attacked the most and may see ransomware attacks quadruple by 2020.
The human attack surface is growing exponentially year over year at a time when people have moved ahead of machines as the primary targets for hackers. There are 3.8 billion internet users in 2017 (51 percent of the world’s population of 7 billion), which is up from 2 billion in 2015.
Cybersecurity Ventures predicts there will be 6 billion internet users by 2022 (75 percent of the projected world population of 8 billion) — and more than 7.5 billion internet users by 2030 (90 percent of the projected world population of 8.5 billion, 6 years of age and older).
The total addressable market — or T.A.M. as venture capitalists call it — for the security awareness training market is exploding. One report predicts the market for training employees on how to detect and defend against spearphishing emails, ransomware attacks and other cyber threats will reach $10 billion by 2027, up from $1 billion in 2014.
Goldman Sachs: KnowBe4 platform is a must-have
“KnowBe4 has separated itself as a leader in the cybersecurity awareness training market, with their platform becoming a 'need to have' for businesses across sectors and geographies in the fight against cyber threats,” said Hans Sherman, a vice president in Goldman Sachs’ Merchant Banking Division who will join the KnowBe4 board of directors in connection with the investment.
Institutional investors and VC firms may view the Goldman Sachs investment as a call to action. There’s a solid lineup of security awareness training companies — each bringing their own unique programs and tools to turn employees into cyber defenders.
If there’s one thing for sure, it’s that a whole lotta employees need to be trained on security. The security awareness market will be an interesting one to watch.
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