Crowdstrike files to go public — lost $140 million on $250 million in revenue last year
Heidi Petty | CNBC
Security software vendor Crowdstrike filed to go public on Tuesday, joining a growing crop of richly valued technology companies hitting the public markets.
In the year that ended on Jan. 31, Crowdstrike had a net loss of $140 million, while revenue more than doubled to $249.8 million, according to the company’s prospectus. A majority of the company’s sales comes through subscriptions sold to over 2,500 companies.
Crowdstrike’s cloud-based technology is designed to detect breaches before they happen while tracking activity on desktops, server computers and other devices. Analysis of the breaches takes place in the cloud, giving the company enhanced data to analyze the growing number of threats that all companies face. Customers include Credit Suisse, Australian mobile phone company Telstra, Tribune Media, and Amazon Web Services.
“Organizations everywhere are becoming more distributed as they adopt the cloud, increase workforce mobility, and grow their number of connected devices,” the company said in its prospectus.
Like most emerging businesses that sell to the enterprise, Crowdstrike spends heavily on its sales force. Sales and marketing costs jumped 66% last year to $172.7 million. The company said most of those costs are related to employee-related expenses, but it also spends on its Fal Con customer conference and other marketing events.
Of the six notable tech IPOs so far this year, two are broadly in the enterprise software market — PagerDuty and Zoom. Both have soared since their debuts, while ride-sharing companies Uber and Lyft have stumbled. Slack, the mobile chat service used by businesses, is likely to be the next company to go public.
PagerDuty CEO Jennifer Tejada with Pagey at the NYSE
Crowdstrike was valued at $3 billion in its last private round last June. It operates in a very competitive market against rivals like antivirus companies McAfee and Symantec and other software security vendors such as Cylance, Carbon Black, Palo Alto Networks and FireEye.
One unnamed channel partner represented 15% of Crowdstrike’s revenue in the year that ended Jan. 31.
“We recently announced a strategic technology and go-to-market partnership with Dell Inc. that will enable Dell’s business customers to seamlessly add the Falcon platform to their purchase of Dell hardware, ” Crowdstrike said in the filing. “Dell and SecureWorks Corp. also agreed to take our Falcon platform to market as their preferred endpoint security offering through their global sales organizations. “
Warburg Pincus is Crowdstrike’s biggest shareholder, with ownership of 30%, followed by Accel at 20% and Alphabet’s CapitalG investment arm at 11%. Google is also a Crowdstrike customer.
The Sunnyvale, California-based company was founded in 2011 and launched its first endpoint-security product two years later.
The stock will trade on the Nasdaq under the ticker symbol “CRWD.” The filing says Crowdstrike is looking to raise as much as $100 million in the initial public offering, though that’s just a placeholder. Goldman Sachs, J.P. Morgan, Bank of America Merrill Lynch and Barclays are leading the deal.
— CNBC’s Ari Levy contributed to this report.