CrowdStrike Prices IPO Above Range at $34

CrowdStrike today marked its first day of public trading, opening at $63.50 after pricing its IPO at $34 per share and exceeding the expected range of $28 to $30 per share, analysts report.

The cloud-based endpoint security firm, operating on the Nasdaq under the symbol "CRWD," raised $612 million ahead of its debut with its initial public offering of 18 million Class A shares priced at $34 each. If it had stuck with the high end of its original range, CrowdStrike would have raised more than $600 million, according to its preliminary prospectus.

According to Bloomberg, shares rose as much as 97% from their initial price to hit $67, and stock was up 83% before noon – putting CrowdStrike at a valuation of about $12.2 billion.

The company was founded in 2011 by chief executive George Kurtz and chief technology officer Dmitri Alperovich, who wanted to address the inefficiencies of legacy security tools on the market. It most recently completed its Series E and has raised a total of $481 million in funding. CrowdStrike was valued at $3 billion in its last private funding round of $200 million last June.

When it was founded, relying on the cloud was risky, Kurtz notes. "Betting big on the cloud – widely considered risky at the time – allows us to ensure a rapid and seamless delivery of innovation and new features to always stay a step ahead of emerging threats," he said in a statement.

Revenue has been ramping up at CrowdStrike, which reported $249.8 million in revenue in the 2019 fiscal year ending January 31, with a net loss of $140.1 million. That's up from $118.8 million in reveneue and a net loss of $135.5 million during the same period a year prior. Customers include 44 of the Fortune 100 companies and nine of the top 20 major banks, CrowdStrike says.

Lead underwriters on CrowdStrike's offering include Goldman Sachs, J.P. Morgan, Bank of America Merrill Lynch, and Barclays.

Hank Thomas, CEO of Strategic Cyber Ventures, has been excited about CrowdStrike's IPO "since before they announced it," he says.

"CrowdStrike proved to me they were the best in the business years ago when they became the gold standard for incident response for mega breaches," he explains. Its threat intel, talent, and marketing have made them stand out, he added. There will only be a few major players emerging in cybersecurity, Thomas predicts; CrowdStrike will be one of them.

The offering is expected to close on Friday, subject to customary closing conditions.

But what's coming next for cybersecurity IPOs this year? Now that "the ice has been broken," as Thomas explains, he anticipates more. "The market and timing [are] right, and with rumors of a looming recession there [is] increased pressure to go public now." In addition to more IPOs, Thomas predict we'll continue to see cybersecurity acquisition news throughout 2019.

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