Cybersecurity start-up Netskope in no rush to go public

Cloud-based cybersecurity start-up Netskope has crossed more than $500m in annual recurring revenue and will focus on becoming profitable with no immediate plan to go public in 2024, its CEO has told Reuters.

CEO Sanjay Beri said the company had been making internal preparations for an initial public offering (IPO) but there was no rush in an election year.

“We don’t need more capital. And IPO really comes down to growing awareness. Our path absolutely is to get to an IPO, perhaps when the markets are ready and elections are over,” Beri said in an interview.

A source close with the matter said it would take about 18 to 24 months for Netskope — one of the highest-valued cybersecurity start-ups — to get ready for an IPO.

Netskope said its subscription revenue, an important metric for software companies, had grown annually at a higher rate than the industry average of 29%, as estimated by research firm Gartner.

The focus was to continue to invest in security products and grow the platform while trying to become cash flow positive “in the near term”, Beri said.

Founded in 2012, Netskope sells software that helps protect cloud services, apps and websites from cyberattacks. It competes with larger companies, including Palo Alto Networks and Zscaler, in the secure access service edge (SASE) market.

The market for SASE is expected to reach more than $25bn by 2027, according to Gartner.

With over 3,400 customers globally, Netskope serves large enterprises, from Ross Stores to Yamaha.

The Santa Clara, California-based company has raised over $1.4bn to date from investors, including most recently $401m in convertible notes led by Morgan Stanley Tactical Value.

Netskope was last valued at $7.5bn in 2021 at a round led by ICONIQ. Its other backers include Sequoia and Accel.

Another SASE vendor, Cato Networks, raised $238m at a valuation of more than $3bn in last September.

Reuters