Shares of data management software maker Rubrik soared on its New York Stock Exchange debut, with the stock opening at $38.60 per share after pricing its IPO at $32 a share on Wednesday. The company raised $752 million by selling 23.5 million shares, giving it a valuation of $5.6 billion. Rubrik’s shares are trading under the ticker symbol “RBRK.” This successful IPO is a positive sign for the tech market, which has seen limited activity in recent years due to investor concerns about unprofitable companies.
The past decade saw a surge of technology companies going public, thanks to low-interest rates from central banks. However, the trend slowed down in late 2021 as worries about a weakening economy led investors to shy away from unprofitable ventures. Rubrik’s IPO, along with others like Reddit and Astera Labs, indicates a potential shift in market dynamics. Founded ten years ago, Rubrik reported a net loss of $354 million in its latest fiscal year, but has increased its revenue from subscriptions to 91%, up from 59% two years ago.
Microsoft’s investment in Rubrik in 2021 has boosted the company’s credibility and valuation. Co-founder and CEO Bipul Sinha retains 8% control, while Lightspeed Venture Partners, where Sinha was previously an investor, holds 25% of the voting power. Sinha acknowledged that market conditions play a role in deciding when to go public, but said that Rubrik was prepared for the opportunity when it arose. The company’s IPO timing is typically determined six to eight weeks in advance, with input from bankers and investors influencing the decision.
Ravi Mhatre, managing director at Lightspeed Venture Partners, highlighted the importance of engaging with public market investors in preparation for an IPO. Sinha’s interactions with potential investors helped shape Rubrik’s approach to going public, focusing on qualities that would appeal to the market. Investors are looking for strong, unique companies with the potential to thrive in the marketplace. Sinha emphasized the importance of not just going public, but staying public and building a sustainable, successful business.
Rubrik’s successful IPO is seen as an indication of renewed interest in tech offerings, as public market investors show an appetite for companies with promising prospects. The company’s shift towards subscription-based revenue has improved its financial standing and made it a more attractive investment opportunity. While market conditions remain a factor in the decision to go public, Rubrik’s solid performance and growth potential have positioned it well for success. As the tech industry continues to evolve, Rubrik’s IPO serves as a positive development in an ever-changing market landscape.
