Rubrik shares went public on the New York Stock Exchange on Thursday at $38 per share. The cybersecurity company priced its shares at $32 apiece on Wednesday evening, just a hair above its original target range of $29 to $31, after raising $752 million. This share price gives Rubrik a fully diluted valuation of $6.6 billion, an increase of 88% from its last primary valuation of $3.5 billion in 2019.
Rubrik sells cloud-based security software to enterprise customers and has 1,700 customers with contracts worth more than $100,000 and 100 customers who pay the company more than $1 million per year. The Silicon Valley startup was founded in 2014 and has raised more than $550 million in venture capital, according to Crunchbase data.
The VCs most hoping for Rubrik’s stock to continue rising are Lightspeed and Greylock. Lightspeed backed the company in five separate rounds, including leading the company’s Series A round in 2015. According to the company’s S-1 filing, Lightspeed and its affiliates owned 23.9% of the shares prior to the IPO by rubric. The companies’ belief in the company may be due to the fact that Rubrik’s co-founder and CEO Bipul Sinha was a partner at Lightspeed from 2010 to 2014. Sinha owns 7.6% shares.
Greylock holds 12.2% of Rubrik’s shares. The venture firm led the startup’s $41 million Series B round in 2016 and also participated in the Series C and D rounds. Greylock partner Asheem Chandna has served on the company’s board since 2015.
In addition to Sinha, Rubrik’s two other co-founders hold significant shares. Arvind Jain, co-founder and now CEO of AI work assistant startup Glean, owns a 7% stake. Arvind Nithrakashyap, co-founder and current CTO of Rubrik, holds 6.7%.
Other well-known VCs also supported the company. Khosla Ventures led Rubrik’s Series C round in 2016; IVP led the company’s Series D round in 2017; and Bain Capital Ventures led the company’s Series E round in 2019. It’s unclear what percentage of shares these companies still own, but it’s less than 5% since none of these investors were named in the company’s S-1. NBA all-star Kevin Durant’s Thirty Five Ventures was also an investor.
The results of Rubrik’s IPO are under more scrutiny than some of the other recent IPOs, as Rubrik’s debut looks more like a 2021 IPO and less like the other 2024 IPOs. Ibotta debuted as a profitable company. Astera Labs and Reddit both recently reported GAAP net income. However, Rubrik is an unprofitable company whose losses continue to grow, not shrink.
The company reported that its revenue increased slightly less than 5% from fiscal 2023 to fiscal 2024, from $599.8 million to $627.9 million. At the same time, the company’s losses continued to increase: net losses increased from 46% in fiscal 2023 to 56% in fiscal 2024.
However, there is one bright spot to the company’s metrics: subscription revenue. In the company’s most recent fiscal quarter, subscriptions accounted for 91% of revenue, up from 73% a year ago. Subscription revenue tends to remain stable, and the growth there may explain why some investors are more confident about Rubrik’s future prospects despite its current losses and lack of profitability.
Rubrik is the fourth venture capital-backed company to go public in recent months as investors appear eager to reopen the IPO market. All three companies that were ahead of Rubrik – Ibotta, Reddit and Astera Labs – rose on the first day of trading and have all been established since then, some in better positions than others. But none of them were a disaster or a bad omen for other potential IPOs this year.
While four positive IPO debuts could prompt more companies to come off the sidelines, the current forecast that rate cuts may not come as early in 2024 as many had predicted could dampen the IPO market’s recent momentum.