Proofpoint to Buy Tessian to Infuse Email Protection With AI

Proofpoint has agreed to purchase a cloud email security provider founded by HSBC, RBS, Santander and UBS alumni to apply artificial intelligence to evolving threats.

See Also: Navigating SEC Compliance: A Comprehensive Approach to Cybersecurity Resilience

The Silicon Valley-based email security vendor said its proposed acquisition of Boston-based Tessian will help Proofpoint address common forms of data loss including data exfiltration. Tessian said its advanced AI guards against evolving email threats and risky user behavior such as misdirected emails and misattached files, which include attachments sent to the wrong person or improperly added to an email chain. These practices continue to be a leading cause of both compliance violations and accidental data loss (see: Tessian: Using Machine Learning to Prevent Data Loss).

“By combining Proofpoint’s best-in-industry data, detection stack and efficacy with Tessian’s advanced behavioral and dynamic detection platform, we can provide our customers with world-class defense and instant protection,” Proofpoint Executive Vice President and General Manager Darren Lee said in a statement.

Tessian’s Journey to Proofpoint

Tessian, founded in 2013, raised nearly $133 million in six rounds of outside funding and currently employs 219 people, down 23.3% from a high of 282 workers in July 2022, IT-Harvest said. The company most recently closed a $65 million Series C funding round in May 2021 led by March Capital. IT-Harvest estimates that Tessian generates $32 million of annual recurring revenue, or $146,119 per employee.

Terms of the acquisition weren’t disclosed, though IT-Harvest estimates Tessian is worth between $307 million and $415 million. Tessian was started by former HSBC Global Banking Analyst Tim Sadler, former RBS Corporate Finance Analyst Edward Bishop and former Santander and UBS M&A analyst Tom Adams, who serve as Tessian’s CEO, chief technology officer and head of client-side engineering, respectively.

“We believed that the next generation of security software had to feel like magic.”


– Tim Sadler, co-founder and CEO, Tessian

Forrester in June named Tessian a strong performer in its email security rankings and praised the firm for being able to spot anomalies in user behavior and real-time security coaching for end users. But the analyst firm knocked Tessian for being overly generic in its user risk scoring, having inconsistencies across hard and soft quarantine, and lacking features such as malware sandboxing, browser isolation and web security (see: Proofpoint, Cloudflare Dominate Email Defense Forrester Wave).

A Proofpoint spokesperson declined an Information Security Media Group request to make executives available to discuss the Tessian acquisition until the deal closes in late 2023 or early 2024.

“Our long-standing vision to secure the human layer has been the driving force behind our innovative platform offering inbound email security, as well as outbound data loss prevention,” Sadler said. “By joining forces with Proofpoint, we can empower organizations to further improve their email security posture, reduce the risk of data breaches, and lighten the workload on their security teams.”

What a Joint Proofpoint-Tessian Offering Does for Customers

Tessian’s Guardian offering prevents misdirected emails and misattached files to help customers meet regulatory compliance and confidentiality agreements and eliminate the risk of reputational damage. The company’s Enforcer offering protects against data exfiltration and safeguards intellectual property, while Defender takes advantage of AI to prevent email attacks and provide contextual warning banners.

“From our first conversation with Proofpoint, it was immediately apparent that we had a shared vision for how AI was revolutionizing the email industry and the opportunity to better protect our customers,” Sadler wrote. “We are making great strides to realize this vision by bringing together Proofpoint’s award-winning AI and large language models and Tessian’s innovative use of advanced behavioral AI.”

Sadler wrote in a blog that he, Bishop and Adams had started Tessian to address the role of human error in cybersecurity without resorting to rule-based and time-consuming software that created friction and false positives for employees. Tessian can help with everything from defending against email threats to protecting against email misdelivery and exfiltration and coaching employees on best security practices.

“We believed that the next generation of security software had to feel like magic – it had to be smarter than a human ever could and remain invisible until it was needed,” Sadler wrote in the blog post. “I couldn’t be prouder of the impact Tessian is having on our customers.”

The Tessian acquisition announcement came just five days after Proofpoint CEO Ashan Willy stepped down to pursue an opportunity outside the cybersecurity space. The company is being led on an interim basis by Remi Thomas, who started as Proofpoint’s chief financial officer in February after spending four years in the same role at Extreme Networks (see: Proofpoint to Get 3rd CEO Since 2022 as Ashan Willy Departs).

This is Proofpoint’s third acquisition since Thoma Bravo took the company private in August 2021 for $12.3 billion in what remains the largest-ever acquisition of a pure-play enterprise cybersecurity firm. Proofpoint purchased deception firm Illusive in late 2022 to add identity risk discovery and remediation and post-breach defense, and in January 2023 the company acquired AI-based data classification firm Dathena.