CrowdStrike files to go public after losing $140 million last year

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CrowdStrike, the cybersecurity vendor best known for investigating the 2016 data breach at the Democratic National Committee, is trying to go public.

The California-based company on Tuesday filed for an initial public offering on the Nasdaq under the ticker symbol “CRWD.” The company aims to raise as much as $100 million in the IPO, according to a regulatory filing submitted to the U.S. Securities and Exchange Commission.

The IPO is led by backers including Goldman Sachs, JPMorgan Chase, Barclays and Bank of America Merrill Lynch.

In the fiscal year that ended on Jan. 31, the company reported a $140.1 million net loss on $249.8 million in revenue, according to the S-1 filing. Most of the firm’s revenue dollars come from its more than 2,500 subscriptions, though those incoming dollars are balanced by a motivation to growth: sales and marketing spending climbed by 66 percent to $172.7 million last year. Google and Amazon Web Services are among its clients.

Competitors include FireEye, Palo Alto Networks, Cylance, Carbon Black, McAfee and Symantec, the company said. Like some of those companies, CrowdStrike has had a tough time turning a profit. The company said it lost $135.5 million in 2018, and $91.3 million in 2017. Most costs were related to employee expenses.

“We have a history of losses and may not be able to achieve or sustain profitability in the future,” the company said when listing risk factors for shareholders.

Many of its competitors “have greater financial, technical, marketing, sales, and other resources, greater name recognition, longer operating histories, and a larger base of customers than we do,” CrowdStrike said in the filing.

CrowdStrike has released oft-cited research on suspected nation state hacking groups with reported ties to North Korea, Iran, China and elsewhere. In February, the company released much-discussed findings that ranked hacking groups by the speed with which they move through victim networks. 

CrowdStrike provides endpoint protection, threat intelligence services and incident response. The company was founded in 2011 but burst onto the public consciousness when it became involved in the investigation into the 2016 data breach at the Democratic National Committee. That attack was carried out by two separate Russian intelligence-affiliated groups the company called Fancy Bear and Cozy Bear.

The Republican National Committee also has hired CrowdStrike to provide cybersecurity services.

The company was valued at more than $3 billion after closing a $200 million funding round in June.

This filing only is the latest example of a security company going public. Tenable announced its own IPO in June last year, while Carbon Black went public the month before. Others including Zscaler already were publicly listed by that time.

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CrowdStrike, IPO, Nasdaq
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