Shares of data management software maker Rubrik soared on their New York Stock Exchange debut Thursday, marking another successful tech IPO amid signs that investors are showing renewed interest in listing young companies following a lengthy period marked by heightened volatility.
The Microsoft-backed company priced its initial public offering (IPO) at $32 per share on Wednesday, above an expected range of between $28 and $31 per share. Rubrik sold 23.5 million shares in the IPO, raising a total of $752m with a valuation of $5.6bn after trading began. The stock ended its first day up by 16% at $37 apiece under ticker “RBRK”.
Few technology firms opted for market debuts in recent years due to waning enthusiasm from investors against less profitable enterprises as the global economy faltered towards the end of last year. However, this trend may be changing with Reddit and Astera Labs both going public earlier this month. Rubrik was founded a decade ago and reported net losses totalling $354m in its latest fiscal year – up from $278m the previous 12 months.
Rubrik generates more than nine-tenths (91%) of all revenues via subscription, compared to around six out of ten two years ago. Microsoft is a significant investor in Rubrik and co-founder Bipul Sinha has an eight per cent controlling stake, while Lightspeed Venture Partners – where he was formerly employed as startup investor – holds 25% voting power over the company’s operations.
Sinha said that although his firm cannot control market conditions entirely, it prepared itself for a potential public listing once circumstances were deemed appropriate. “When we see markets are receptive and we were ready, then we go,” he explained in an interview with Reuters news agency last week ahead of Rubrik’s floatation plans going live this past Thursday.
Mhatre said that businesses contemplating their first IPO typically spend between six to eight weeks determining the timing for its launch while consulting widely among investment bank representatives as well as shareholders, adding: “Bipul spent a lot of time with public market investors both in 2023 and then again last year.”
From these discussions, Sinha said that potential investors are seeking out strong companies to list which have the capacity for longevity on the stock exchange, boast unique offerings within their respective markets whilst remaining resilient over extended periods of time. “Folks [investors] are looking for durable businesses with a moat in the marketplace and clearly winning,” he continued before concluding: “[Staying public is crucial], not going public.”
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