KnowBe4 plans to rely exclusively on the channel as it uses some of the proceeds from its initial public offering to expand its footprint outside the United States.
The Clearwater, Fla.-based security awareness training vendor saw its stock surge $7.84 (49 percent) to $23.84 per share Thursday in its first day of trading on the Nasdaq Global Select Market, notching a valuation in excess of $3.5 billion. KnowBe4 had priced its initial public offering of 9.5 million shares at $16 each, putting the company on track to raise $152 million.
“For us, it’s exciting to be a public company,” said KnowBe4 CEO Stu Sjouwerman, who founded the company in 2010. “We appreciate that the market has validated our concept.”
The security awareness training market has matured at different speeds in different regions, and Sjouwerman said the Middle East and Japan are just now starting to see the rapid rise in demand that North America experienced a half-decade ago. This prompted KnowBe4 to localize its entire platform in Japanese, including the phishing templates, training prompts and admin console, he said.
KnowBe4 has done the same thing in Portuguese to serve its Brazilian customers, and will localize in German, French and Spanish next as the company works toward eventually making its platform available in 10 languages. Translating not only the front-end but also the admin console makes KnowBe4 usable for IT workers serving SMB clients in places like Japan, where only 5 percent of people speak English.
The company has grown international sales from 5 percent of KnowBe4’s revenue in 2018 to 9.7 percent of revenue in 2019 to 11.9 percent of revenue in 2020, according to a filing with the U.S. Securities and Exchange Commission (SEC). KnowBe4 will serve international markets exclusively through solution providers since Sjouwerman believes there’s simply no way to scale abroad without using the channel.
“We’re focusing on international now because those markets are ready now,” Sjouwerman said. “I would venture to say you can’t afford not to do this.”
Closer to home, Sjouwerman said KnowBe4 plans to use money from the IPO to beef up its channel portal with additional training and marketing collateral. KnowBe4 is well-suited for MSPs since they can make money upfront by charging customers for the platform and accompanying services and then reduce their costs over time as training leads to a reduction in endpoint infections among customers.
The company has a console designed specifically to allow MSPs to manage all their customers from a single place rather than forcing partners to hop from one customer account to another, Sjouwerman said. MSPs and channel partners accounted for 37.4 percent of KnowBe4’s revenue in 2020, up from 32.3 percent of revenue in 2019 and just 20.4 percent of revenue in 2018, according to SEC filings.
“We’ll certainly have more resources to support our channel partners,” Sjouwerman said. “We need partners to service our international markets.”
From a technology standpoint, Sjouwerman said KnowBe4’s process for enabling large enterprises to easily integrate both Azure and on-premise versions of Active Directory is a competitive differentiator. KnowBe4 also offers a huge number of APIs so that customers can integrate the company’s platform into their existing security stack in a straightforward manner, according to Sjouwerman.
“We are solely focused on making this a hugely powerful platform,” Sjouwerman said. “We’re currently running away from the rest of the pack in terms of features. That’s a really strong position to be in.”