Cybersecurity company Rubrik, backed by Microsoft (NASDAQ:MSFT), is looking to raise around $713 million in its initial public offering (IPO), according to a Reuters report. Rubrik plans to sell 23 million shares priced in the range of $28 to $31 per share. At the upper end of this price range, Rubrik would be valued at $5.4 billion.
Rubrik was founded in 2014 by venture capitalist Bipul Sinha and currently serves over 5,000 business customers. According to its IPO filing, the company’s subscription annual recurring revenue (ARR) increased by 47% year-over-year as of January.
Annual recurring revenue (ARR) is the total revenue generated from subscriptions on an annual basis.
In the financial year ending January 31, 2024, the company incurred a loss of $354 million on revenues of $628 million, compared to a loss of $278 million on revenues of $600 million in the previous fiscal year.
Furthermore, Rubrik also disclosed in its IPO filing that the cybersecurity company is cooperating with a U.S. fraud investigation. This investigation, conducted by the U.S. Department of Justice, involves a former Rubrik employee suspected of diverting funds paid by the U.S. government for government contracts into an operating entity created by this individual.
Is IPO ETF a Good Investment?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on Renaissance IPO ETF (NYSEARCA:IPO) shares based on 49 Buys and 5 Holds assigned in the past three months, as indicated by the graphic below. After a 35.8% rally in its share price over the past year, the average IPO price target of $44.89 implies a 15% upside potential from current levels.
