Security News
Kyle Alspach
As the IPO window reopens, CEOs at fast-growing security vendors tell CRN there are a number of factors going into their decision about when to take the leap.
Return Of The IPO
As the CEO of one of the top-valued cybersecurity unicorns, Snyk, Peter McKay is watching closely as tech companies once again take their shots at going public. After a nearly two-year drought of initial public offerings for major IT and cybersecurity companies, the IPO market is showing “signs of life,” McKay noted in a recent interview with CRN. Shares in chip designer Arm are set to begin trading Thursday following the company’s top-of-range IPO pricing Wednesday, while marketing automation firm Klaviyo and grocery delivery service Instacart are soon expected to complete IPOs, as well.
[Related: 10 Cybersecurity Companies Making Moves: August 2023]
Around the tech industry, it’s clear that “a lot of people are watching to see how that goes,” McKay said. The still-to-be-determined fate of the Klaviyo and Instacart IPOs could be seen as an especially important signal to other VC-funded unicorns like Snyk, a developer security platform that was most recently valued at $7.4 billion by its investors.
Many venture-backed IT and cybersecurity firms aren’t sure yet whether the IPO waters are hot or cold, McKay said. The thinking, he said, goes something like this: “Let’s let some people go in, see what the temperature is, and make that [IPO] assessment [for ourselves].”
For the cybersecurity industry, it’s been a couple of years since a pure-play security vendor went public. It’s been so long that of the five most recent security vendors to complete IPOs, two aren’t even public anymore, having returned to private equity ownership.
Those include the most recent cybersecurity company to complete an IPO, ForgeRock, which went public in September 2021. In August, shortly before ForgeRock’s two-year anniversary as a public company, private equity firm Thoma Bravo completed its acquisition of the identity security firm and folded the vendor into one of its other portfolio companies, Ping Identity. Another company from the cybersecurity IPO class of 2021, KnowBe4, was also taken private this year.
In interviews with CRN, McKay and six other CEOs at fast-growing cybersecurity vendors have recently shared some of their calculus around when—and why—they might pursue an IPO for their companies. The other CEOs include Netskope’s Sanjay Beri, who said he has no doubt that the company, which competes with publicly traded security vendors including Palo Alto Networks and Zscaler, is on the IPO path. “Netskope will always be Netskope,” he said.
Also among the CEOs is Rubrik’s Bipul Sinha, who discussed the data security vendor’s IPO ambitions with CRN earlier this year, prior to reports that Rubrik may become the first cybersecurity company to test the IPO waters in 2023.
What follows are comments from CRN interviews with seven cybersecurity CEOs that are eyeing an IPO.
