Microsoft-Backed Rubrik Shares Jump 25% After $752 Million IPO

(Bloomberg) — Rubrik Inc. shares jumped as much as 25% in its trading debut after the cloud and data security startup backed by Microsoft Corp. raised $752 million in its initial public offering.

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Shares of Rubrik rose to $38.07 per share as of 12:59 p.m. on Thursday. The company priced its initial public offering at $32 each, above a marketed range, and slightly expanded the number of shares to 23.5 million.

The trading gives Rubrik a market value of $6.7 billion based on the outstanding shares listed in its filing with the US Securities and Exchange Commission. Accounting for stock options and restricted share units, the company’s fully diluted valuation is closer to $8 billion.

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.

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.

Rubrik Chief Executive Officer and Chairman Bipul Sinha, who is also one of the company’s co-founders, currently owns 7.6% of the Class B shares. Co-founder and Chief Technology Officer Arvind Nithrakashyap owns a 6.7% stake. Those shares will have 20 votes each, compared with one each for the Class A shares sold in the IPO.

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.

The offering was led by Goldman Sachs, Barclays, Citigroup and Wells Fargo & Co. The company’s shares are trading on the New York Stock Exchange under the symbol RBRK.

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