UPDATE: July 27, 2018: In another strong performance by an enterprise technology company in the market, Tenable began publicly trading Thursday and closed the day up 31.5%. The company priced shares at $23 and began trading at $33, closing the day slightly over $30.
The company added roughly a quarter million dollars to its valuation. With warnings from the U.S. government on enterprise attacks and news of critical infrastructure being targeted, cybersecurity fears have made a welcoming market for cybersecurity companies.
But the cybersecurity vendor landscape is crowded, and Tenable still has to make itself stand out from competitors touting advanced machine learning applications, cyber warranties and optimistic guarantees.
- Cyber exposure company Tenable filed to go public late last week, with the number and price of shares still to be determined. The Maryland-based cybersecurity company was founded in 2002 and has raised more than $309 million across four funding rounds, according to Crunchbase.
- Tenable touts its SaaS product as the "Cyber Exposure Command Center" for CISOs, offering visibility into enterprise security to facilitate security management and digital transformation. As of December 2017, the company had more than 24,000 customers, including 53% of Fortune 500 companies, according to the prospectus.
- Last year, the company booked $187.7 million in revenue, a 51% growth year-over-year, but saw $41 million in losses. In the first three months of 2018, the company has earned more than $59 million in revenues, compared to $40.5 million for the same period in 2017, with more than $15 million in losses.
Across industries, IPOs have raised $13.1 billion in 2018 thus far, the highest flow in three years, according to Renaissance Capital. The tech sector has collected eight of the 10 spots for best-performing U.S. IPOs with 15 out of 17 finishing at or above the offer price. With IPO returns of 61%, experts expect an "active" third quarter for tech IPOs.
Two other cybersecurity companies, Zscaler and Carbon Black, went public this year with relatively successful IPOs. While confidential filing makes the IPO road map for the second half of the year difficult to read, the first sixth months bode well for a strong finish to the year.
The cybersecurity market is crowded with competitors, making profitability an uphill battle for vendors. In its prospectus, Tenable recognized potential difficulty down the road in scaling the business and maintaining profitability or growth rates, as well the ability of its products to detect vulnerabilities well enough to protect its reputation.
Standing out in the crowd can be tough. Some vendors are turning to warranties up to $1 million to boost confidence in their solution — even with the recognition that no system is infallible. Vendors with good products will face little burden from such a program, according to Jeremiah Grossman, current adviser and former chief of security at SentinelOne, in an interview with CIO Dive.