Rubrik, a data management software company backed by Microsoft, priced its IPO at $32 a share, above its expected range. The offering raised $752 million and valued the company at $5.6 billion. Rubrik planned to sell 23 million shares ahead of its New York Stock Exchange debut. The IPO comes at a slow period for venture-backed tech IPOs, with concerns about the economy and rising interest rates causing investors to shy away from risky assets. Startups have been staying private longer, waiting for better market conditions to exit.
The IPO market has been largely shut down since late 2021, but some companies are beginning to go public. Rubrik joins the likes of Instacart, Klaviyo, Reddit, and Astera Labs in making their public debuts. Rubrik has shifted its focus from perpetual licenses and maintenance contracts for hardware to subscriptions for cloud-based cybersecurity software. This change has increased the company’s revenue from subscriptions to 91%, up from 59% two years ago. While revenue has increased less than 5%, annual recurring revenue from subscriptions has jumped 47%.
Rubrik’s customer base includes big names like Barclays, Carhartt, and Home Depot, with nearly 100 customers contributing over $1 million in subscription ARR. The company’s CFO, Kiran Choudary, emphasized subscription ARR as a key metric. However, Rubrik’s losses are widening, with a reported $354 million net loss in the latest fiscal year. Microsoft invested in Rubrik in 2021 at a reported valuation of $4 billion, and venture firm Lightspeed holds over 25% of voting power following the IPO, with CEO Bipul Sinha holding 8% control.
Rubrik’s IPO is a significant milestone for the company, as it looks to capitalize on the growing demand for cloud-based cybersecurity software. With the majority of its revenue now coming from subscriptions, Rubrik is well-positioned for future growth. The company’s strong customer base and strategic partnerships, including backing from Microsoft, give it a competitive edge in the data management software market. Despite widening losses, Rubrik’s focus on subscription-based revenue and cybersecurity solutions could drive continued success in the public market.
Investors are showing renewed interest in the IPO market, with companies like Rubrik generating excitement among market participants. The company’s strong financials and strategic positioning make it an attractive investment opportunity for those looking to capitalize on the growing demand for cloud-based cybersecurity solutions. Rubrik’s successful IPO is a testament to its leadership team’s ability to navigate challenging market conditions and capitalize on emerging trends in the tech industry. With its continued focus on subscription-based revenue and strategic partnerships, Rubrik is poised for continued growth and success in the public market.
