CrowdStrike Files To Go Public

CrowdStrike is an American cybersecurity technology company based in Sunnyvale, California. The cloud-based company has filed to go public. The cybersecurity platform valued at $3.3 billion in 2018 revealed its IPO prospectus.

The company plans to trade on the Nasdaq under the ticker symbol “CRWD.” It plans to raise an additional $100 million, though that figure is typically a placeholder amount. Through venture capital funding from Warburg Pincus, which owns a 30.3 percent pre-IPO stake, Accel (20.3 percent) and CapitalG (11.2 percent) CrowdStrike has raised $480 million.

Crowdstrike’s financials need a bit of concern. While its revenues are growing at an admirable rate from $53 million in 2017 to $119 million in 2018 to $250 million in the year ending January 31, 2019, its expenditure is more than its gross profit. Recently, the company posted a gross profit of $163 million on total operating expenses of about $300 million.

The company is not yet profitable. Its total losses are increasing year by year, from $91 million in 2017, $135 million in 2018 and $140 million in 2019.

The chief executive officer is George Kurtz and chief technology officer Dmitri Alperovitch, who is also the former McAfee executives. CrowdStrike, which develops security technology that looks at changes in user behavior on networked devices and uses that information to identify potential cyber threats, has reportedly mulled over an IPO for some time.

Competing with Cylance, Carbon Black and others, the company sells its endpoint protection software to enterprises on a subscription basis. In its S-1, CrowdStrike believes in its offering based on the rise of cloud computing and the growing threat of cybersecurity breaches. By 2021 the estimated total addressable market will be worth $29.2 billion.

The company writes, “We founded CrowdStrike in 2011 to reinvent security for the cloud era. When we started the company, cyber attackers had a decided, asymmetric advantage over existing security products. We turned the tables on the adversaries by taking a fundamentally new approach that leverages the network effects of crowdsourced data applied to modern technologies such as artificial intelligence, or AI, cloud computing, and graph databases.”

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