Cybersecurity is a massive sector, but startups in the category are more likely to be acquired than go public. Even Wiz, which for a time held the title of the fastest-growing startup, abandoned its IPO ambitions when it agreed to sell to Google earlier this year.
In the past few years, there have been scant few significant cybersecurity debuts such as SentinelOne in 2021, and Rubrik last year.
Next week, the sector is expected to add one more public company: the cloud cybersecurity platform Netskope. The 13-year-old startup also shares its earliest and largest investor with Rubrik: Lightspeed Venture Partners.
The large Silicon Valley firm had a 23.9% ownership of Rubrik when it went public at $6.6 billion last year. In the case of Netskope, Lightspeed owns 19.3% of the company that aims to achieve a valuation of as much as $6.5 billion, according to the updated S1 filing.
Lightspeed first backed Netskope in 2013, leading the company’s $21 million Series B.
The company set its IPO price between $15 and $17 per share, and at the upper end of that range, giving Lightspeed an approximately $1.1 billion windfall, in terms of the value of its stake.
Netskope’s other major investors include ICONIQ Growth, which holds 19.2% of the company’s stock, followed by Accel with a stake of nearly 9%.
Netskope is known as a Secure Access Service Edge (SASE) provider. It offers cybersecurity for an enterprise’s cloud infrastructure, with such products as secure web gateways and firewall as a service. The company’s main competitors are Zscaler and Palo Alto Networks.
The company was last valued at $7.5 billion, when it raised a $300 million Series H led by ICONIQ Growth in 2021, the height of the ZIRP era. It also took on a $401 millio convertible note in 2023.
But those capital infusions weren’t enough to get Netskope to profitability. For the first half of the year, Netskope’s revenue grew to $328.5 million from $251.3 million a year ago. During that time, its net loss narrowed to $169.5 million from $206.7 million, the filing shows.
If Netskope goes public at a valuation of $6.5 billion, the company would be among a number of VC-backed companies that have recently debuted below their final private market valuation.
Other companies that went public below their latest private valuations include Chime and Hinge Health. But not all new listings are being met with caution. Some recent IPOs, like Figma and Circle, have soared on the first day of trading.