CrowdStrike, the cybersecurity company that uncovered Russian hackers inside the servers of the Democratic National Committee, priced its shares well above an already upsized range for its initial public offering in a sign of strong investor demand for the latest Silicon Valley listing. The California-based company late on Tuesday priced 18m shares at $34 a piece, raising $612m ahead of its debut on Wednesday. Earlier this month, CrowdStrike raised its price range to $28 to $30 a share, from an initial range of $19 to $23. The IPO price gives the company an initial market value of close to $7bn, which would put it among the largest cyber security IPOs to date. It is also more than double the $3bn at which it was valued at its previous funding round in June last year. Underwriters could choose to sell another 2.7m shares via a so-called greenshoe mechanism to bring in further proceeds of nearly $92m. The cybersecurity marketplace is crowded. It includes big groups such as Microsoft and Cisco, midsize companies such as McAfee and a long tail of start-ups. But CrowdStrike has made its name through several high-profile investigations as hostile state cyber activity rises. In particular, it discovered two Russian cyber espionage groups — Fancy Bear and Cozy Bear — had hacked the DNC’s email servers and leaked emails, in a bid to influence the US presidential election in 2016. Founded in 2011, the company joins a handful of so-called unicorns — private tech companies with valuations of at least $1bn — that have headed for public markets in 2019.
According to its regulatory filings, CrowdStrike will list with a dual-class share structure that would give existing shareholders more control. Its backers include private equity group Warburg Pincus, venture capital firm Accel Partners and CapitalG, one of Google’s venture capital arms. The IPO is being led by Goldman Sachs, JPMorgan, Bank of America Merrill Lynch and Barclays.
Source: Financial Times