Rubrik, a data-management software company backed by Microsoft, recently priced its initial public offering (IPO) at $32 a share, above its expected range. The 10-year-old company planned to sell 23 million shares on the New York Stock Exchange under the ticker symbol “RBRK,” raising $752 million and valuing the company at $5.6 billion. This move comes at a time when the IPO market for venture-backed tech companies has been slow, with concerns about the economy and rising interest rates keeping investors cautious.
In recent years, Rubrik has shifted from selling perpetual licenses and hardware maintenance contracts toward cloud-based cybersecurity software subscriptions. This strategy change has been successful, with 91% of their revenue now coming from subscriptions, up from 59% just two years ago. While overall revenue increased less than 5% in the latest fiscal year, annual recurring revenue from subscriptions surged 47%. The company counts almost 100 customers contributing over $1 million in subscription annual recurring revenue, including major names like Barclays, Carhartt, and Home Depot.
Despite their revenue growth, Rubrik’s losses have been expanding. The company reported a $354 million net loss in the latest fiscal year, an increase from around $278 million in the prior year. Microsoft invested in Rubrik in 2021 at a valuation of $4 billion, and Lightspeed Venture Partners, where CEO Bipul Sinha was previously a partner, will maintain over 25% of voting power post-IPO. Sinha himself will hold an 8% stake in the company, highlighting the continued involvement of key investors in Rubrik’s future.
The company’s IPO comes in the wake of a slow period for venture-backed tech IPOs, with few companies in the space going public in the past year. Startups have been staying private longer, waiting for better market conditions. While the tech market has shown signs of recovery, companies have been cautious about entering the public market. Rubrik’s decision to go public now demonstrates confidence in their business model and subscription-focused revenue strategy.
Rubrik’s IPO follows recent public offerings by companies like Instacart, Klaviyo, Reddit, and Astera Labs, marking a return to the public market for venture-backed tech firms. Rubrik’s shift towards cloud-based subscription services aligns with broader trends in the technology industry, where companies are moving away from traditional licensing models towards recurring revenue streams. With a strong customer base and revenue growth in subscriptions, Rubrik is positioning itself for success as it enters the public market.
As Rubrik begins trading on the NYSE, the company will be closely watched by investors and industry observers. Its success in the public market will depend on its ability to continue growing subscription revenue while managing its widening losses. With key investors like Microsoft and Lightspeed backing the company, Rubrik has a solid foundation for future growth. By focusing on cybersecurity software and cloud-based solutions, Rubrik aims to capitalize on the increasing demand for data management tools in an evolving digital landscape.
