Proofpoint CEO On Closing ‘Watershed’ $1.8B Hornetsecurity Deal, IPO Plans

The acquisition of the Microsoft 365 security specialist sets the stage for massive new MSP opportunities with Proofpoint in the U.S., as well as a possible initial public offering for the company in 2026, Proofpoint CEO Sumit Dhawan tells CRN.

Proofpoint’s now-completed acquisition of Microsoft 365 security specialist Hornetsecurity sets the stage for massive new MSP opportunities with Proofpoint in the U.S., along with a possible initial public offering for the company in 2026, according to Proofpoint CEO Sumit Dhawan.

With the closure of the Hornetsecurity acquisition Monday, Proofpoint for the first time disclosed the exact price tag for the deal—$1.8 billion—making it the largest acquisition in the vendor's 23-year history.

The acquisition enables Proofpoint to expand beyond the enterprise with a major push into the U.S. SMB market around Hornetsecurity’s MSP-friendly offering, which has largely focused on the European market to date, Dhawan said in an interview with CRN.

“This is a watershed moment,” he said. “For our partners, if you have had any engagement with Proofpoint [in the past]—and have wished that the power of Proofpoint defense was available for customers of a smaller size—now you have it.”

Hornetsecurity’s main offering is 365 Total Protection, which provides MSPs with a multitenant platform for delivery of email security, backup and access control, as well as awareness training and compliance.

The London-based company has reached annual recurring revenue (ARR) of $200 million with growth up 20 percent year over year, according to Proofpoint. Hornetsecurity founder and CEO Daniel Hofmann will continue to lead the unit within Proofpoint.

The completion of the Hornetsecurity acquisition, which was initially announced in May, will also help to advance Proofpoint’s plans to return to public ownership, with the company eyeing an IPO as soon as next year, Dhawan told CRN.

Proofpoint recently met with public-market investors and has received positive feedback thus far, meaning that “hopefully 2026 is the year” for the company’s IPO, Dhawan said. The vendor has been privately held since 2021 when it was acquired by Thoma Bravo for $12.3 billion.

Proofpoint surpassed $2 billion in ARR in 2024, the company disclosed previously, and Dhawan said the vendor has set a goal of reaching $5 billion in ARR by 2030. Revenue is growing at a double-digit rate, year over year, and the company has a “very healthy” customer retention rate, he said.

“As I look across the [security] industry, there are probably only a handful of companies that have software ARR with that kind of growth profile,” Dhawan said.

What follows is more of CRN’s interview with Dhawan.

What are the major opportunities for MSPs in the Hornetsecurity deal?

Small businesses have a lot of cyber needs at this point in time. But putting together an enterprise cyber stack, for MSPs, is not a great experience. What does that lead to? That leads to poor experience for customers, more expensive cost structure—which means poor margins for MSPs—and constant churn that they're dealing with in terms of acquiring new logos and losing customers. And to add any new service for them is a nightmare. They needed some kind of an MSP platform for providing cybersecurity on top of the services that they're already enabling for small businesses. They enable productivity suites. They enable remote management. And cyber is a natural evolution of what SMBs ask their MSPs to provide for them. In the absence of a platform, they have to put a hodgepodge of technologies together. Our acquisition of Hornetsecurity changes that. Now [MSPs] don't have to worry about multiple tech stacks, always keeping them up to date, multiple billing systems, multiple programs. [Hornetsecurity offers] a single program, single billing system, one set of technology that's always updated. And through their control panel, they can manage all their customers, regardless of what type of cyber service levels they're at—upsell, cross-sell—in a seamless fashion.

What do you see as the key differentiators you’ll be able to offer with Hornetsecurity?

It really brings the power of everything that you need to secure, protect and be compliant with Microsoft 365 in a single platform—with multiple plans that [the MSPs’] customers can graduate to, as they get to see the value of the cybersecurity platform. It's such a beautifully designed platform. And it's proven. It's a $200 million ARR business, which makes them a leader [in their segment] in Europe, and nearly a leader globally. That’s despite having a small presence in the U.S. The alternative to Hornetsecurity is a plethora of technologies, which means you will hire more [staff], deal with multiple programs, multiple billing infrastructures—all leading to poor experience and poor SLAs and poor profitability.

What should MSPs expect in terms of the new partner program you’ll be launching around Hornetsecurity?

MSPs should expect that the more they [invest] with us, and the higher the value of services they offer, the more profitability they’ll gain. In the past, because we didn't have a scaled MSP business, our programs have been very centered around a fixed price structure, without any volume discounts. We always had an email security product, but it was a single product. It was one of the technologies in the overall MSP cyber stack. For the MSPs, our program was kind of one of many. We had to work many times with distributors, aggregators. Our program wasn't quite designed for partners to do a strategic handshake with us as a cybersecurity partner. For our [new] program, we're going to be taking on elements of what we have learned from Hornetsecurity’s program—which is volume-based incentives and strategic incentives. Hornetsecurity is more than one product—it's a full platform with multiple plans. The higher the plan, the more revenue per seat that Proofpoint gets, and the more margin we are able to offer to the partners. And then the appropriate incentive structure is offered in both the front-end and backend. So all of those aspects of the partner program are going to be taken from [Hornetsecurity], and they're going to be rolled out to the partners as we kick off early next year.

Are you expecting this will lead to Proofpoint expanding the overall number of MSP partners you’re working with?

That's our focus, that's our goal. In the past, we have done investments in MSP growth, predominantly through our distribution partners. We are obviously going to rely on them. But MSPs, once they have been recruited, when they are taking on a full platform like Hornet, they also need direct touch and support from us. Because if they are acquiring a lot of customers—and now they have a lot of technology that this platform provides—larger MSPs would want direct engagement at the technical level, to ensure that each and every one of their end customers is getting the most out of the platform. And of course, that drives more profitability for them. So our investments will be done in the same way—one, working with distributors to continually recruit new partners, and two, as larger MSPs come in and start using our platform, [we’ll be] providing the right partner success model with them to make sure they can take each of their customers to the highest-possible plan in our portfolio. And that's a significant change in our investment [strategy]. We've added a [sizable] team. So when we get the new year started, we're just going to hit the ground running. This is a watershed moment. For our partners, if you have had any engagement with Proofpoint [in the past]—and have wished that the power of Proofpoint defense was available for customers of a smaller size—now you have it.

Could you say a bit more about the advantages of platform consolidation for partners from this deal as well?

In the cybersecurity ecosystem, whether it's for enterprise software or for small businesses via MSPs, there's no way they can keep dealing with the plethora of software companies to build up their stacks. In the industry, it's natural that larger players like us will continue to drive market consolidation. And if you're at our scale, you have the size to be able to drive the right experience to both enterprise customers and managed service providers. In the last two years, our focus has been to make sure we lead in the markets we play in—and then secondly, make the right acquisitions that reinforce our strategic [focus on] human- and agent-centric security. Microsoft 365 is the productivity or digital interface for SMBs, and Hornetsecurity secures Microsoft 365 for the SMBs, via MSPs. And when we started speaking with Hornet, we shared the vision of protecting humans and AI agents in the same way. We're just complementary in terms of who we serve. Proofpoint was serving enterprise, Hornet was serving SMBs through MSPs.

It's a sizable investment for us. The deal size is actually $1.8 billion, so clearly it shows our intent to invest. This is not to harvest profitability or cash flow. This is about driving a business that's already doing extremely well, growing at a healthy 20-percent rate, and fueling that growth through additional investment—specifically in the areas where we have a strong brand and already have healthy partner relationships, which is the U.S. And so, to me [Hornetsecurity] is kind of like this beautiful F1 car that's designed in Europe, which we’re now bringing to the racetracks in the U.S.

Could you provide an updates about plans for a Proofpoint IPO?

[Closing the Hornetsecurity deal] was one of the milestones we were waiting for. Being a European company as Hornet is, we have to take a quarter to two quarters to make sure all the accounting, the GAAP revenues, get reconciled appropriately, and that our finance teams get comfortable with that. Part of [the IPO timing] will be how quickly we can get ourselves prepared. But just in terms of the [IPO] market, it seems quite promising. We've started having some conversations with investors as well. We hosted an investor day a few weeks ago, where we shared our strategy, and it was well-received by the investors. So as long as the markets stay as they are, we have been given positive feedback. And so hopefully 2026 is the year.