Rubrik IPO Draws Strong Investor Demand, Oversubscribed 20 Times

Rubrik Inc., a cloud and data security startup backed by Microsoft Corp., has received orders for about 20 times the number of shares available in its planned initial public offering (IPO), according to people familiar with the matter.

The company, which is said to raise up to $713 million in the first-time share sale, stopped taking orders for its listing at 4 p.m. New York time on Tuesday.

The strong investor demand indicates a robust interest in Rubrik's cloud and data security offerings. The company is marketing the sale of 23 million shares at a price range of $28 to $31 each. At the top end of this range, Rubrik would command a market value of around $5.4 billion.

The oversubscription level for Rubrik's IPO is comparable to that of digital marketing software firm Ibotta Inc., which listed on the New York Stock Exchange last week and saw its $577 million offering attract offers for more than 20 times the available shares.

Rubrik's IPO is expected to price at the top of the range on Wednesday and begin trading on Thursday, with Goldman Sachs, Barclays, Citigroup, and Wells Fargo leading the offering.

Why this matters: Rubrik's heavily oversubscribed IPO highlights the strong investor appetite for promising technology companies, even amidst a challenging economic environment. The successful listing could open the door for more tech IPOs and boost confidence in the sector.

Founded in 2013, Rubrik serves over 6,000 customers with its cloud computing and cybersecurity platform. The company's security solution combines AI and automation to protect data across enterprise, cloud, and SaaS applications. Rubrik has been transitioning customers from perpetual licensing to its Rubrik secure cloud subscription service, which has reached $784 million in annual recurring revenue (ARR).

Despite reporting a net loss of $354.2 million last year, bankers are optimistic that investors will focus on Rubrik's 47% growth in subscription revenue, although approximately 60% of this growth came from existing customers migrating to the cloud product. Rubrik's overall top line grew by 5% in the past year.

In 2021, Rubrik formed a strategic alliance with Microsoft that included an equity investment valuing the startup at $4 billion. The company believes it is well-positioned for continued expansion as the volume and value of data grows and cyber attacks become more sophisticated, particularly with the rise of generative AI.

Rubrik's IPO marks the first US software listing since September 2021, when automation firm Klaviyo's offering priced above range but subsequently traded poorly. At the top end of its price range, Rubrik's IPO would give the company a fully diluted market capitalization of up to $6.45 billion and an enterprise value of around $6.2 billion. The 15-firm syndicate managing the offering anticipates it to price at the high end of the range, with some sources suggesting it could even price above the indicated range, further emphasizing the strong investor demand for Rubrik's shares.

Key Takeaways

• Rubrik's IPO oversubscribed 20x, indicating strong investor demand.
• Rubrik aims to raise up to $713M, with a potential $5.4B market value.
• Rubrik's IPO expected to price at the top of the range, reflecting high demand.
• Rubrik provides cloud and data security solutions, with $784M in annual recurring revenue.
• Rubrik's IPO marks the first US software listing since September 2021.