Cybersecurity firm Proofpoint explores external funding as it eyes IPO

LONDON — Privately-held cybersecurity firm Proofpoint is exploring tapping external investors for pre-IPO financing and the consideration of mergers and acquisitions of smaller cyber companies as it seeks a return to public markets in 2026, CEO Sumit Dhawan told CNBC.

“We are looking at potentially exploring public markets sometime in the next 12 to 18 months,” Dhawan, who took the reins as Proofpoint’s newly appointed chief in 2022, a year after the company was acquired by private equity firm Thoma Bravo.

Dhawan added that the timing of Proofpoint’s IPO would still remain dependent on general market conditions as well as the outcome of the 2024 U.S. presidential election.

Since Proofpoint’s 2021 buyout by Thoma Bravo and Dhawan’s subsequent appointment as CEO, company management has been pushing the firm to consider strategic opportunities such as mergers and acquisitions of smaller cybersecurity firms to stimulate industry consolidation.

Noting that there are currently too many players in the cybersecurity market, Dhawan said that Proofpoint is currently looking for acquisition targets that offer a “strategic fit” for the company — for the right price.

“It’s happened in many other technology spaces — it happened with infrastructure, it has happened in the application platform space — where you start building fewer providers but richer platforms and, as a result, there will be consolidation,” Dhawan told CNBC in an exclusive interview this week.

“There are at this point in time, 2,000 or so non-profitable cybersecurity companies that are venture-backed, so clearly they’ll either get consolidated or potentially not exist. Because there’s no way any market can have that many players. So it’s going to happen, it’s bound to happen.”

Dhawan said he’s finding there’s a bit of a “bid-ask spread” in the market currently when it comes to cybersecurity opportunities, meaning target companies are asking for more money at the sale price than the valuations they’re being offered. But he added that he’s seeing some “great opportunities” in the market.

Proofpoint went public in the U.S. in 2012, but subsequently delisted after Thoma Bravo acquired the company in a $12.3 billion deal in 2021. The buyout came after investor concerns over a deceleration in revenue growth.

Now, Proofpoint is once again looking to tap the public markets.

“We are…