Rubrik: Microsoft-backed startup prices IPO at $32 per share to raise $752m

Rubrik Inc., a data and cloud security startup backed by Microsoft Corp., priced its IPO above the marketed range and expanded it slightly to raise a total of $752 million of dollars.

Rubrik, who had planned to sell 23 million shares at between $28 and $31 apiece, ultimately sold them for $32, according to a statement. The company also added 500,000 shares to the IPO late Wednesday, according to a filing with the U.S. Securities and Exchange Commission.

At the IPO price, Rubrik would have a market value of approximately $5.6 billion, based on the outstanding shares listed in its filings. Including stock options and restricted stock units, the company’s fully diluted valuation is more than $6.6 billion.

Rubrik’s offering had received about 20 times more orders than there were shares available and the company was considering selling them for as much as $34 apiece, Bloomberg News reported earlier.

Rubrik, which secures data for its enterprise customers across enterprise applications, cloud and software-as-a-service, is only the second major U.S. IPO by an enterprise software startup in the over the last two years. Klaviyo Inc., a marketing and data automation provider backed by Shopify Inc., ended the drought in September with a $659 million offering.

AI wave

The company is riding a wave of tech IPOs in 2024. They include Reddit Inc., semiconductor equipment maker Astera Labs Inc. and software marketing company Ibotta Inc., which debuted public last week.

Growing demand for exposure to the AI ​​boom has boosted optimism among tech companies such as Reddit, whose boasting of revenue from licensing data for training AI models contributed to its successful introduction in purse of $860 million. AI has also prompted industry giants like Salesforce Inc. to bet on a new round of technology investment. This could benefit companies like Rubrik, which has yet to turn a profit, after contract spending in the software sector fell.

Rubrik was founded in 2013 and launched its first product in 2016. It said it now has more than 6,100 clients, including Goldman Sachs Group Inc., Barclays Plc and Citigroup Inc. Its clients include governments and universities, as well as a range of companies. such as Home Depot Inc., PepsiCo Inc., Illumina Inc., Fiserv Inc. and the Denver Broncos of the National Football League.

Microsoft participation

Microsoft invested in Rubrik in 2021 as part of a funding round that valued the startup at $4 billion, Bloomberg News reported. Rubrik, whose backers also include Bain Capital Ventures, Lightspeed Venture Partners, Greylock Partners and Khosla Ventures, has raised $1.18 billion to date, according to data provider PitchBook.

Bipul Sinha, CEO and Chairman of Rubrik, who is also one of the co-founders of the company, currently holds 7.6% of the Class B shares. Co-founder and Chief Technology Officer Arvind Nithrakashyap holds a stake of 6.7%. These shares will have 20 votes each, compared to one each for the Class A shares sold in the IPO.

Through its alliance with Microsoft, Rubrik has committed to spending $220 million over a 10-year period on the use of Azure, Microsoft’s cloud computing platform. Rubrik will use Azure for its data security solutions and will preferentially offer public cloud capabilities for Azure to its customers, according to its documents.

Rubrik reported a net loss of $354 million in the fiscal year ended Jan. 31 and negative free cash flow of $24.5 million, despite a 47% increase in annual recurring subscription revenue , according to its documents.

IPO rebound

One advantage Rubrik can count on is that the vibrant IPO market can help improve sentiment. Debuting in the uncertain environment of 2023 for new listings, Klaviyo has spent much of its time as a public company below its offering price. In contrast, Rubrik is expected to begin trading amid a broad rebound in the U.S. IPO market.

Since the start of the year, companies have raised more than $12.2 billion on U.S. stock exchanges, more than twice as much as during the same period in 2023, according to data compiled by Bloomberg. Two dozen deals of more than $100 million have been made this year, covering industries from sporting goods to security testing.

Rubrik’s offering is being led by Goldman Sachs, Barclays, Citigroup and Wells Fargo & Co. The company’s shares are expected to begin trading Thursday on the New York Stock Exchange under the symbol RBRK.

This story was published from a wire feed without modifications to the text. Only the title has been changed.