The first great technology IPO of the year after the one billion has opened with a bang. Zscaler, a security startup that confidentially requested an IPO last year, closed its first day of operations at $ 33 per share, 106% more than its opening price of $ 16.
The cloud service company It started trading this morning as ZS on Nasdaq at a price of $ 27.50 / share, a pop of 71.9 percent on its opening price, and its shares today reached a high of $ 33.37. Activity at Zscaler could point to a bullish momentum for security startups and potentially public listings for technology companies in general, as well as pent-up demand in a climate that has been somewhat dry for large IPOs after some notable flops .
That could be a good omen for Dropbox, Spotify and others who are planning or considering public listings in the coming weeks and months.
Zscaler, a cloud services company, recorded revenues of $ 125.7 million in 2017 with net losses of $ 35.5 million and said in its S-1 that it expected "to continue incurring net losses in the foreseeable future". But he had a moderate price for his IPO, and the result was that there seemed to be more appetite for the company than expected.
Initially, Zscaler expected to sell 10 million shares in a range between $ 10 and $ 12 per share, but interest led the company to expand that to 12 million shares in a range of $ 13-15, which then He moved up to $ 16 and Zscaler last night raised $ 192 million giving him a valuation of more than $ 1.9 billion, a sign of great interest in the investment community he now hopes to follow in his debut and more.
Zscaler is a specialist in an area called software defined perimeter (SDP), which allows companies and other organizations to better control how they allow employees to access specific applications and services within their IT networks: the idea is that instead of giving access to the entire network, employees authenticate only for the applications they specifically need for their work.
SDP architectures have become increasingly popular in recent years as a way to better mitigate network security threats where employees use a variety of devices, including their private mobile phones, to access data and applications in corporate networks and in the cloud, which have become routes for malicious hackers to violate systems.
SDP services are being adopted. of the likes of Google, and are being built by other technology companies, both those that seek to provide more value-added services in the existing cloud or other IT offerings, and those that are already playing in the area of security, including Cisco , Check Point Software, EMC, Fortinet, Intel, Juniper Networks, Palo Alto Networks, Symantec (which has been involved in IP lawsuits with Zscaler) and more, demonstrating the opportunity and challenge in the Zscaler market. Estimates of market value range between $ 7.8 billion and $ 11 billion for 2023.
Go here for more information on the initial public offering, and hear from the CEO himself.