UPDATED 11:47 EST / FEBRUARY 26 2018

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Cybersecurity firm PhishMe acquired at $400M valuation, rebrands as Cofense

PhishMe Inc., a security startup that protects businesses from phishing attacks and other cyberthreats, announced today that it has been acquired by private equity consortium at a valuation of $400 million.

According to Fortune, the equity group includes Pamplona Capital Management, which bought two-thirds of the shares, and BlackRock, which owns the remaining third.

PhishMe, which also announced today that it is rebranding as Cofense, released a report in November showing that each successful phishing attempt can cost a business $1.6 million, but the startup believes that security technology can only go so far in mitigating the risk.

The company has previously told businesses that they must “engage your entire employee base in the war against phishing attacks,” which is why PhishMe offers training tools in addition to its threat monitoring systems. These tools repeatedly simulate phishing attacks in order to train employee behavior over time.

“PhishMe was founded to challenge the cliché that people are the weakest link in security,” Rohyt Belani, chief executive and co-founder of Cofense, said in a statement. “Our 1700+ enterprise and mid-market customers affirm that not only can their employees be conditioned to be less susceptible to cyber-attacks, but, in fact they can be turned into sensors that provide very timely intelligence.”

Aaron Higbee, the PhishMe’s chief technology officer, added in a blog post that the company is expanding its approach to security, which is why it is changing its name to Cofense. “Cofense delivers collective, complete phishing defense,” said Higbee. “We’ve been moving in this direction for years, with solutions that accelerate incident response, fueled by employee-sourced phishing-attack intelligence.”

Higbee told customers in his post to “expect major updates” to the startup’s entire security suite, starting with the release of Cofense Triage next week. He also said Cofense will be expanding its reach across Japan, the Middle East and Europe in the near future. “Our rebranding and acquisition are serious energizers. It’s been a great ride so far — and it’s about to get crazy fun,” said Higbee.

Belani told Fortune that the company, which grossed $55 million last year, hopes to break even on a cash basis in the fourth quarter of 2019. It plans to double annually recurring  revenues in the “months to come.”

High-profile cyberattacks such as WannaCry and NotPetya have fueled enterprise security concerns, which has also fueled share prices and funding for security companies such as PhishMe. The cybersecurity industry has also seen a number of other acquisitions over the last year, such as when SecureAuth Corp. acquired and later merged with Core Security SDI Corp. PhishMe is also not the only security startup to to win a private buyout, as Barracuda Networks Inc. paid $1.6 billion to go private in November.

Photo: Cofense

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