Cybersecurity software company Rubrik’s stock popped 16% on its first day of trading to value the company at $6.6 billion based on outstanding shares, a signal of confidence that the IPO window for venture-backed companies is finally reopening.
Rubrik’s debut, which priced above its expected range Wednesday at $32 per share, attracted significant investor demand, drawing 20 times more orders than it had available shares in its IPO. The company was last valued at $4 billion in 2021, according to PitchBook data.
“I think this could be the initial company that opens the window to extend more broadly for others to follow, I really do,” said Ravi Mhatre, co-founder and partner at Lightspeed Venture Partners, which led the cybersecurity company’s 2015 Series A and held a 24% stake at the time of IPO.
The IPO marks a major win for Lightspeed, which incubated Rubrik at its Menlo Park offices. Lightspeed first invested $9.4 million at a $25 million post-money valuation in Rubrik’s Series A. The firm subsequently invested a total of $362 million over the data security provider’s nine-year stint as a private company. Based on its stock price of $37 at end of trading Thursday, the firm’s total stake comes to $1.44 billion.
Greylock Partners, which led Rubrik’s Series B at a $136 million post-money valuation, and Khosla Ventures, which led its Series C at a $311 million post-money valuation, will also generate significant returns from the debut.
The past two years have been slow for exits in the information security industry. 2023 generated $10.7 billion in combined VC and PE exit value for the vertical, down 24.6% from a total exit value of $14.2 billion in 2022, according to PitchBook data.
"[Rubrik’s IPO] demonstrates that there is demand in the market for healthy IPOs,” said Andy Ellis, operating partner at cybersecurity investor YL Ventures. “A year ago, a lot of people were questioning and saying, ‘Will there ever be a pure-play cybersecurity player IPOing again?’” he said, adding that Rubrik’s debut proves that fear was overblown.
Founded in 2014, Rubrik is a data and cloud system provider that helps safeguard enterprise data. The company’s annual recurring revenue from subscriptions grew 47% in 2023. Rubrik reported a $354 million net loss in the last fiscal year, and its IPO marks a test of the appetite among public investors for high-growth venture-backed companies that are not yet profitable.
Mhatre said that the “unglamorous” category of data management infrastructure has become more critical as cyberbreaches rise and AI adoption increases demand for data security.
Featured image by SOPA Images/Getty Images
