Cybersecurity software company Rubrik is looking to raise big bucks through an initial public offering (IPO). According to a report by Reuters, the company, backed by tech giant Microsoft, is aiming to raise up to $713 million by selling 23 million shares priced between $28 and $31 each. This could value Rubrik at around $5.4 billion, although the source familiar with the matter cautioned that the final figures could change based on market conditions.
Rubrik, headquartered in Palo Alto, California, provides cloud-based data backup and ransomware protection software solutions. They boast over 5,000 business customers, including tech leader Nvidia and retail giant Home Depot. Their business seems to be flourishing, with their IPO filing revealing a 47% year-over-year increase in subscription annual recurring revenue as of January 2024. However, the company is not without its challenges. Rubrik's financial statements for the 12 months ending January 31st show a loss of $354 million on revenue of $628 million, compared to a loss of $278 million on revenue of $600 million a year earlier.
Adding another layer of complexity to their IPO plans is an ongoing US fraud investigation into a former Rubrik employee. As per a Reuters report from February 2024, the US Department of Justice launched a probe into whether the ex-employee, who worked in Rubrik's sales division, diverted funds paid by the US government for contracts with the company into a separate entity they created. Rubrik has not yet commented on the investigation.
Despite these hurdles, Rubrik's decision to go public reflects a broader trend of recovery in the US IPO market. After a slowdown in 2022 and 2023, companies like social media platform Reddit and semiconductor connectivity firm Astera Labs have successfully completed their IPOs, paving the way for others to follow suit. Several other companies, including Cato Networks and Synechron, are also reportedly prepping for public offerings after witnessing the positive market response to recent listings.
Rubrik's IPO will be led by a consortium of banking giants - Goldman Sachs, Barclays, Citigroup, and Wells Fargo. The company plans to list its shares on the New York Stock Exchange under the ticker symbol RBRK.
While Rubrik's IPO holds promise, investors will likely be closely monitoring the ongoing fraud investigation and the company's path to profitability. The success of their public offering will depend on their ability to navigate these challenges and capitalize on the growing demand for robust cybersecurity solutions in today's digital landscape.
