Netskope Aims for $6.5 Billion Valuation in Upcoming IPO as Cybersecurity Startup Market Shows Mixed Results
In the rapidly expanding realm of cybersecurity, startups continue to be more frequently acquired rather than going public. This trend is evident even for high-growth companies such as Wiz, which opted to sell to Google instead of pursuing an IPO this year.
The sector has witnessed a dearth of significant cybersecurity debuts in recent years, with exceptions like SentinelOne in 2021 and Rubrik in the previous year. Next week, however, is poised to add another public company: cloud cybersecurity platform Netskope. Sharing its earliest and largest investor with Rubrik, Lightspeed Venture Partners, owns a significant stake of approximately 19.3% in Netskope, which aims for a valuation of up to $6.5 billion.
Lightspeed first supported Netskope in 2013, leading its Series B funding round of $21 million. The company’s IPO price ranges between $15 and $17 per share, with the upper end implying a valuation of $6.5 billion, translating to an estimated windfall of around $1.1 billion for Lightspeed based on its stake’s value.
In addition to Lightspeed, ICONIQ Growth holds 19.2% of Netskope’s shares, with Accel owning a nearly 9% stake. Known as a Secure Access Service Edge (SASE) provider, Netskope offers enterprise-level cybersecurity solutions for cloud infrastructure, including secure web gateways and firewall as a service. Key competitors include Zscaler and Palo Alto Networks.
Despite significant capital injections totaling $701 million through Series H funding led by ICONIQ Growth in 2021 and a $401 million convertible note in 2023, Netskope remains yet to achieve profitability. For the first half of the year, revenue increased to $328.5 million from $251.3 million a year ago, while net loss narrowed to $169.5 million from $206.7 million, as shown in the latest S1 filing.
If Netskope lists at a valuation of $6.5 billion, it will join several venture-backed companies that have recently debuted below their final private market valuation. Other examples include Chime and Hinge Health. Yet not all initial public offerings (IPOs) are met with skepticism; some, like Figma and Circle, have experienced impressive growth on their first day of trading.
