Netskope Joins Rubrik in Rare Cybersecurity IPO, Supported by Lightspeed
Cybersecurity startups are increasingly opting for acquisition over public offerings, a trend highlighted by Wiz’s recent decision to sell to Google instead of pursuing an IPO. As the sector continues to evolve, Netskope, a cloud cybersecurity platform, is set to make its public debut next week. This 13-year-old company, backed by prominent investors including Lightspeed Venture Partners, aims for a valuation of up to $6.5 billion, marking a significant moment in the cybersecurity landscape.
Netskope’s IPO Plans and Valuation
Netskope is preparing for its initial public offering (IPO) with a proposed share price between $15 and $17. If the company achieves the upper end of this range, it will be valued at approximately $6.5 billion. This valuation would provide Lightspeed Venture Partners, which holds a 19.3% stake in Netskope, with a potential windfall of around $1.1 billion. Lightspeed first invested in Netskope back in 2013, leading a $21 million Series B funding round. The company has seen significant growth over the years, but it has not yet reached profitability, despite raising substantial capital.
Investor Landscape and Financial Performance
In addition to Lightspeed, Netskope’s investor roster includes ICONIQ Growth, which owns 19.2% of the company, and Accel, with nearly 9%. The company was last valued at $7.5 billion following a $300 million Series H funding round in 2021. However, Netskope’s financials reveal a complex picture. For the first half of this year, the company’s revenue increased to $328.5 million, up from $251.3 million during the same period last year. Despite this growth, Netskope reported a net loss of $169.5 million, although this was an improvement from a loss of $206.7 million in the previous year.
Market Context and Competitive Landscape
Netskope operates in the competitive Secure Access Service Edge (SASE) market, providing cybersecurity solutions for cloud infrastructures. Its primary competitors include established firms like Zscaler and Palo Alto Networks. The cybersecurity sector has seen a limited number of significant public debuts in recent years, with notable examples including SentinelOne in 2021 and Rubrik last year. As Netskope prepares for its IPO, it joins a list of venture capital-backed companies that have recently gone public below their last private market valuations, a trend that raises questions about investor sentiment in the current market.
Recent Trends in IPOs
While some companies have faced challenges in their public offerings, others have experienced strong performances. Recent IPOs, such as those of Figma and Circle, have seen their stock prices soar on the first day of trading. This mixed landscape reflects the complexities of the market, where investor confidence can vary widely. As Netskope approaches its IPO, it will be interesting to see how the market reacts and whether it can achieve its ambitious valuation goals amidst the ongoing trends in the cybersecurity sector.
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