Cybersecurity firm Proofpoint considers pre-IPO funding as it plots a return to public markets

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 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