Governance & Risk Management
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Next-Generation Technologies & Secure Development
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Privacy
In First Cybersecurity IPO Filing Since 2021, Rubrik Describes Bond With Microsoft
Rubrik became the first cybersecurity company to pursue an initial public offering since 2021, revealing increased sales, mounting losses and a heavy reliance on three channel partners.
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The Silicon Valley-based data security startup said 76% of its $627.9 million in sales for the fiscal year ended Jan. 31 flowed through three channel partners: Arrow Enterprise Computing Solutions, Exclusive Networks and Promark Technology. The distributors drove continued sales growth as the company will reportedly raise between $500 million and $700 million in a New York Stock Exchange public offering.
“We aim to build an enduring institution underpinned by a unique platform that delivers data security products to solve critical problems and delight our customers,” Rubrik co-founder, chairman and CEO Bipul Sinha said in a letter to potential investors. “Our goal is to lead the data security market, which we believe is the future of cybersecurity.”
Rubrik intends to use the net proceeds of its IPO for general corporate purposes – including working capital, operating expenses and capital expenditures – and may also acquire or invest in complementary businesses, products, services or technologies, according to a filing Monday with the U.S. Securities and Exchange Commission. The company plans to be listed under the ticker symbol RBRK (see: Why Rubrik Is Looking to Break Cybersecurity’s IPO Dry Spell).
Slow Growth, Deepening Losses
The company has committed to spending $220 million over the next decade to use Microsoft Azure for its data security technology and preferentially offer Azure’s functionality to customers. Rubrik has more than 6,100 clients across the financial services, retail, energy, healthcare, public sector, technology and services industries, including Barclays, The Home Depot, Whirlpool, the state of Utah and Choice Hotels.
“There was an opportunity to build a lasting company.”
– Bipul Sinha, CEO, Rubrik
Rubrik experienced steady but not spectacular growth over the past year, according to its 250-page filing with the SEC late Monday. Its sales inched ahead to $627.9 million in the most recent fiscal year, up 4.7% from $599.8 million the year prior. But the company’s net loss jumped to $354.2 million in the fiscal year ended Jan. 31 – 27.5% worse than a loss of $277.7 million in the prior fiscal year.
“The legacy backup and recovery market was ripe for such a transformation into data security based on cloud and cybersecurity trends,” Sinha wrote in the letter. “There was an opportunity to build a lasting company.”
U.S. sales made up 68% of Rubrik’s revenue in fiscal 2024, up from 69% in fiscal 2023. About 26% of Rubrik’s revenue in the most recent fiscal year came from Europe, the Middle East and Africa; 4% came from Asia-Pacific; and 2% came from other parts of the Americas. Rubrik said its international activities will continue to grow as the company pursues opportunities in both new and existing markets.
Cybersecurity’s First IPO Since 2021
Rubrik’s 3,100-person employee base is distributed across the globe, with 54% located in the United States, 26% based in India and the remaining 20% distributed across 21 other countries, according to the company’s SEC filing. The company said its main competitors are data management and protection firms such as Dell EMC, IBM, Veeam and Cohesity and firms that provide cyber detection and investigation.
“We will continue to invest in yet-to-be-certain markets and non-consensus ideas, with the approach to create customer and shareholder value,” Sinha said in the letter. “Our goal is to ensure Rubrik has the best opportunities to achieve its highest potential.”
Rubrik’s IPO filing comes 32 months after San Francisco-based digital identity vendor ForgeRock raised $275 million on a $2 billion valuation in a New York Stock Exchange public offering. 2021 was a banner year for cybersecurity IPOs; KnowBe4, SentinelOne, Darktrace and ForgeRock all went public. But a reversal of economic fortunes led to Vista Equity buying KnowBe4 and Thoma Bravo buying ForgeRock.
The firm has raised more than $550 million since its founding in 2014, including a $261 million Series E funding round at a $3.3 billion valuation that helped Rubrik move into security and compliance. Rubrik in August purchased data security posture management startup Laminar for $104.9 million to unify cyber posture and recovery and provide visibility into where a company’s data lives and who has access (see: Rubrik Buys Startup Laminar to Unify Cyber Posture, Recovery).
Of Rubrik’s 6,100 customers, 1,742 of them were recording more than $100,000 in subscription annual recurring revenue while 99 customers generated more than $1 million in subscription ARR. Those large customers accounted for 80% of Rubrik’s subscription ARR as of Jan. 31. Increasing the number of Rubrik clients with at least $100,000 in subscription ARR is an indicator of market penetration and demand.