Deal Radar 2009: Proofpoint

Founded in 2002, Proofpoint is a leading email security and data loss prevention solution provider. The company allows large enterprises to block spam, protect against email viruses, and ensure compliance with corporate policies and regulations through their messaging infrastructure. Launched in 2003, its flagship product, Proofpoint ENTERPRISE™, uses advanced statistical machine learning models, or “MLX technology”, to accurately identify spam using different attributes to differentiate between spam and valid email.

In October, Proofpoint launched Proofpoint 6, a SaaS and appliance email security and data loss prevention platform. Proofpoint 6 seeks to combine inbound anti-spam and anti-virus, outbound data loss prevention, email encryption and policy enforcement features into an easy-to-use and easy-to-manage platform for controlling email. The platform includes the availability of Proofpoint Encryption™, a policy-based email encryption solution, data loss prevention security and workflow enhancements, support for DomainKeys Identified Mail (DKIM) email authentication to defend against email address spoofing. The company has made the new platform’s features available for both Proofpoint’s SaaS and appliance deployments.

Further, with the introduction of Proofpoint 6, Proofpoint ENTERPRISE™ is available both on-demand and on-premises with two new solution suites: Proofpoint ENTERPRISE Protection Suite and Proofpoint ENTERPRISE Privacy Suite. While Proofpoint ENTERPRISE Protection seeks to deliver all of Proofpoint’s best-in-class inbound email security and email management components, Proofpoint ENTERPRISE Privacy seeks to provide “defense in depth” for private information of all types. The company has priced the Proofpoint ENTERPRISE Privacy bundle (including Proofpoint Encryption) at less than $17 per user, per year for organizations with 5,000 to 10,000 inboxes.

The company faces stiff competition from Google, which entered the market is 2007 by acquiring Postini, Cisco, which acquired IronPort Systems, and Autonomy Corp, which acquired Zantaz. However, despite the competition, Proofpoint grew in 2008 and maintained a customer renewal rate of more than 98%. The company, in 2008, had also acquired Fortiva, a software-as-a-service email archiving startup at an estimated $70 million. Fortiva, at the time of acquisition, had 45 employees and was earning $15 million to $20 million in revenue from about 200 enterprise customers.

The company’s target segments include universities, health-care and financial services companies, retailers, government organizations, and Internet service providers. Customers include Hitachi Data System, Hospital Corporation of America, Burlington Coat Factory, LifeLink Foundation, Mary Kay, Tyson Foods, National Instruments, and the University of Texas Medical Branch, among others.

Proofpoint has raised $86 million so far: a $$7 million Series A from Mohr, Davidow Ventures, Benchmark Capital, and Stanford University in July 2003; a $9 million Series B from New York-based RRE Ventures, Mohr, Davidow Ventures, Benchmark Capital, and Stanford University in October 2003; a $20 million Series C from Meritech Capital Partners, Mohr, Davidow Ventures, Benchmark Capital, and Stanford University in September 2004; a $20 million Series D from Bridgescale Partners, Benchmark Capital, Inventures Group, JAFCO Ventures, Meritech Capital Partners, Mohr Davidow Ventures, and RRE Venture in March 2006; and a $28 million Series E from DAG Ventures, Benchmark Capital, Bridgescale Partners, Inventures Group, JAFCO Ventures, Meritech Capital Partners, Mohr Davidow Ventures, and RRE Ventures in February 2008.

Suggested Reading:
*Deal Radar 2009: LiveOffice
*Web 3.0 & Google
*Postini gets high marks

This segment is a part in the series : Deal Radar 2009