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Netskope hits $500M in revenue, no 2024 IPO plans

Cloud-based cybersecurity startup Netskope has crossed more than $500 million in annual recurring revenue and will focus on becoming profitable with no immediate plan to go public this year, its CEO told Reuters.

Chief Executive Sanjay Beri said the company has been making internal preparations for an initial public offering (IPO) but there was no rush in an election year.

“We don’t need more capital. And IPO really comes down to growing awareness. Our path absolutely is to get to an IPO, perhaps when the markets are ready and elections are over,” Beri said in an interview.

A source close with the matter said it would take about 18 to 24 months for Netskope – one of the highest-valued cybersecurity startups – to get ready for an IPO.

Netskope said its subscription revenue, an important metric for software companies, has grown annually at a higher rate than the industry average of 29%, as estimated by research firm Gartner.

The focus is to continue to invest in security products and grow the platform while trying to become cash flow positive “in the near term”, Beri said.

Founded in 2012, Netskope sells software that helps protect cloud services, apps and websites from cyberattacks. It competes with larger companies, including Palo Alto Networks and Zscaler in the so-called secure access service edge (SASE) market.

The market for SASE is expected to reach more than $25 billion by 2027, according to Gartner.

With over 3,400 customers globally, Netskope serves large enterprises, from Ross Stores to Yamaha.

The Santa Clara, California-based company has raised over $1.4 billion to date from investors, including most recently $401 million in convertible notes led by Morgan Stanley Tactical Value.

Netskope was last valued at $7.5 billion in 2021 at a round led by ICONIQ. Its other backers include Sequoia and Accel.

Another SASE vendor, Cato Networks, raised $238 million at a valuation of more than $3 billion in last September. Reuters

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