Israeli cybersecurity company SentinelOne (NYSE: S) ended its first day of trading on the NYSE, with its share price up 21.43% at $42.50, giving a market cap of $10.775 billion.
On Tuesday the company had raised more than $1.2 billion at a company valuation of nearly $9 billion, just eight years after it was founded, by issuing 35 million shares at $35 per share, higher than the $31-$32 range at which the shares had been previously priced. SentinelOne will raise an additional $184 million, if the underwriters exercise their options to buy an additional 5.25 million shares at the IPO price within 30 days.
SentinelOne, which has developed an AI-based platform to protect end-points, was founded by CEO Tomer Weingarten, and Almog Cohen.
The company's shareholders include Insight Ventures, Tiger Global, Redpoint, Third Point Ventures, Data Collective Ventures and Anchorage Capital Partners. Weingarten held shares worth $304 million at the IPO. According to IVC, SentinelOne raised $797 million prior to its IPO in eight financing rounds, the most recent of which was conducted just eight months ago at a company valuation of $3.1 billion, while in the financing round eight months before that SentinelOne was worth $1.1 billion. So the company's valuation has risen more than ten-fold in just 16 months.
Weingarten told "Globes" after the IPO, "We are today a platform company with 20 modules and a complete set of capabilities that protect all the end points of an organization, by using AI that works in real-time and can monitor every part of the organization and can understand and halt something that is taking place without any human intervention. This is a unique system worldwide that protects end points like laptops, and desktop computers as well as servers, cloud environments, and IoT devices.
He added, "In addition we are a data company. All this allows huge amounts of data in real time from all devices, which provides an organization with the ability to see every part of it in real time. The organizational network has changed substantially in recent years with a shift to securing assets rather than securing networks, so attention revolves around us and one of our rivals. Today we are one of the world's fastest growing cybersecurity companies.
What interested investors during your road-show?
"They were overall super-positive and that was also the reason why we raised the share price range. There was almost no investor that didn't want to be part of our story. They understood that we have a significant technological advantage, a strong management team, a very attractive financial profile and growth over time. We are one of the world's best companies today."
As of today the company is not profitable. Did you present any sort of path in the direction of profitability?
"Like any company in our life cycle, profitability is not something that is expected or goes hand in hand with very major growth. Expenditure is a calculated decision that is under control and we know how much we are investing and what we get in exchange for it, and that is a kind of process that has ups and downs. Of course, the long-term aim is unequivocally to become a profitable company but there are several stops on the journey."
Why did you choose to go for an IPO? Was it the market conditions or your maturity as a company?
"It was a combination of several things. Market conditions are very difficult to forecast, so it rested on our maturity. For a company like ours, it is very significant to be publicly traded, transparent, and someone you can rely on. There is a certain mystery about a private company. From our point of view, we have been managing SentinelOne, as if it were a public company for the past nine or ten quarters."
How do you explain the jump in valuation from $1.1 billion, 18 months ago to $3.1 billion six months ago and now $9 billion?
"Raising money privately is good and fine but you find your value on the public market, which is derived from what investors overall are prepared to pay for your company - what you receive on the private market is not really an indication."
"Overall the offerings and the valuations are at a point of time and we all continue working and performing. It is a long journey. The rise in valuation is a macro factor related to the market. Investors today look at the digital revolution and there is here a big opportunity and a company like ours is very much enjoying the huge boost in tech acquisitions, so that investors understand that in the coming years companies like these will generate very major revenue, especially if they are good companies and it is an attractive investment option."
Where will you be in several years
"We will continue to do what we do. Growth is something we will continue to focus on."
Is the ambition to be bigger than Check Point and Palo Alto Networks?
"I can't say on that but of course we have ambitions to be far bigger than that."
How has the entire process been for you personally?
"Excellent. It has been a very interesting process, a little tiring but very positive, and I'm happy that everybody is happy."
Published by Globes, Israel business news - en.globes.co.il - on July 1, 2021
© Copyright of Globes Publisher Itonut (1983) Ltd. 2021