(Bloomberg) -- Cybersecurity firm Rubrik Inc., a cloud and data security startup backed by Microsoft Corp., is raising $736 million in its initial public offering priced above a marketed range, according to a person familiar with the matter.

Rubrik is selling 23 million shares for $32 each after marketing them for $28 to $31 each, said the person, who asked not to be identified because the information wasn’t public yet.

At that price, Rubrik would have a market value of $5.6 billion, based on the outstanding shares listed in its filings with the US Securities and Exchange Commission. Including stock options and restricted share units, the company’s fully diluted valuation would be closer to $6.6 billion.

Rubrik’s offering had received about 20 times as many orders as there were shares available and the company was considering selling them for as much as $34 apiece, Bloomberg News reported earlier. A representative for Rubrik declined to comment. The IPO price was reported earlier by CNBC.

Rubrik, which secures its corporate customers’ data across enterprise, cloud and software-as-a-service applications, is only the second sizable US IPO by an enterprise software startup in the past two years. Shopify Inc.-backed marketing and data automation provider Klaviyo Inc. ended the drought in September with a $659 million offering.

AI Wave

The company is riding a wave of technology IPOs in 2024. They include Reddit Inc., semiconductor equipment maker Astera Labs Inc. and software marketing firm Ibotta Inc., which made its public debut last week.

Surging demand for exposure to the AI boom has spurred optimism for tech firms such as Reddit whose touting of revenue from licensing data for AI model training helped make its $860 million IPO a success. AI has also prompted industry giants like Salesforce Inc. to bet on a new cycle of tech investment. That could benefit companies like Rubrik, which hasn’t turned a profit yet, after contract spending in the software sector has declined.

Read More: SAP Rises Most Since January on Record Cloud Backlog Growth

Rubrik was founded in 2013 and released its first product in 2016. It said it now has more than 6,100 customers, including Goldman Sachs Group Inc., Barclays Plc and Citigroup Inc. Its clients include governments and universities, as well as an array of companies such as Home Depot Inc., PepsiCo Inc., Illumina Inc., Fiserv Inc. and the National Football League’s Denver Broncos.

Microsoft Stake

Microsoft made an equity investment in Rubrik in 2021 in a financing round that valued the startup at $4 billion, Bloomberg News reported. Rubrik, whose backers also include Bain Capital Ventures, Lightspeed Venture Partners, Greylock Partners and Khosla Ventures, has raised $1.18 billion to date, according to data provider PitchBook.

Through its alliance with Microsoft, Rubrik has committed to spend $220 million over the course of up to 10 years for the use of Azure, Microsoft’s cloud computing platform. Rubrik will use Azure for its data security solutions and preferentially offer public cloud functionality for Azure to its customers, according to its filings.

Rubrik recorded a $354 million in net loss in the year ended January 31, and $24.5 million in negative free cash flow, despite growing its subscription annual recurring revenue by 47%, according to its filings.

One advantage Rubrik may be able to count on is that the buoyant market for IPOs may help with sentiment. Debuting in 2023’s uncertain environment for new listings, Klaviyo has spent much of its time as a public company below its offer price. By contrast, Rubrik is set to begin trading amid a broad rebound in the US IPO market.

Since the beginning of the year, companies have raised more than $12.2 billion on US exchanges, more than twice as much as in the same period in 2023, according to data compiled by Bloomberg. Two dozen offerings over $100 million were completed this year, spanning sectors from sporting goods to safety testing.

Rubrik’s offering is being led by Goldman Sachs, Barclays, Citigroup and Wells Fargo & Co. The company’s shares are expected to begin trading Thursday on the New York Stock Exchange under the symbol RBRK.


--With assistance from Ryan Gould.

(Updates with Rubrik response in fourth paragraph)

©2024 Bloomberg L.P.