Netskope follows Rubrik as a rare cybersecurity IPO, both backed Lightspeed

In the expansive world of cybersecurity, startups often find themselves leaning towards acquisition rather than pursuing public offerings. A notable example is Wiz, which relinquished its IPO plans to accept a buyout from Google earlier this year. Despite the vastness of the sector, significant IPOs have been few and far between, with SentinelOne making headlines in 2021 and Rubrik following suit last year. Next week, the landscape is poised for change as Netskope, a cloud cybersecurity platform with a 13-year history, prepares to enter the public market. The startup is backed by Lightspeed Venture Partners, the same early investor that played a crucial role in Rubrik’s successful IPO, where Lightspeed held a 23.9% stake at a valuation of $6.6 billion. For Netskope, Lightspeed currently owns 19.3%, as the company sets its IPO share price between $15 and $17. If priced at the upper end, Netskope could reach a valuation of $6.5 billion, resulting in a potential $1.1 billion gain for Lightspeed based on their investment. Other significant stakeholders in Netskope include ICONIQ Growth, which holds 19.2% of the company, and Accel, with nearly 9%. Netskope specializes in Secure Access Service Edge (SASE) technology, providing essential cybersecurity solutions for cloud infrastructures, including secure web gateways and firewall services. Key competitors in this space include Zscaler and Palo Alto Networks. Previously valued at $7.5 billion, Netskope raised $300 million in a Series H funding round led by ICONIQ Growth in 2021. However, despite these financial boosts, the company has yet to achieve profitability. In the first half of this year, Netskope reported revenue growth to $328.5 million, up from $251.3 million the previous year, though net losses also narrowed to $169.5 million from $206.7 million. If Netskope successfully prices its IPO at a $6.5 billion valuation, it will join a growing list of venture capital-backed firms that have gone public at valuations lower than their last private market prices, alongside companies like Chime and Hinge Health. However, the market has seen positive responses to some recent IPOs, such as Figma and Circle, which experienced significant increases on their initial trading days.