Yet another high-profile startup has joined the IPO rush: Cybersecurity firm CrowdStrike, which the Democratic National Committee hired in 2016 to fight Russian spies, filed to go public on Tuesday.
The Sunnyvale, California-based company founded in 2011 by George Kurtz, Dmitri Alperovitch, and Gregg Marston quickly became one of the fastest-growing startups in America, ranking No. 144 on the 2016 Inc. 5000 list. It also racked up $481 million in venture funding, a $3.4 billion valuation, and clients like Google, Credit Suisse, Amazon Web Services, and Tribune Media. CrowdStrike's software platform was the first of its kind to exist solely on the cloud, a strategy that has since been emulated by numerous firms. Like many well-known companies going public in 2019, CrowdStrike is unprofitable: Its S-1 prospectus reported a net loss of $140 million in 2018, despite $250 million in revenue.
Kurtz, CrowdStrike's CEO, got the idea for the company while working as IT security company McAfee's CTO--a role he assumed after selling his previous startup Foundstone (an Inc. 5000 honoree in 2004) to the cybersecurity giant in 2004 for nearly $90 million. While on a plane, Kurtz--who started programming video games in fourth grade on his Commodore and wrote the bestselling book Hacking Exposed in 1999--watched a fellow passenger turn on his laptop and wait 15 minutes for McAfee's software to stop scanning before he could use the computer.
Kurtz quickly pitched Alperovitch, then McAfee's vice president of threat research, and former Foundstone CFO Marston on the concept of a native cloud security platform. The trio then secured $25 million in funding from private equity firm Warburg Pincus.
CrowdStrike became a household name in 2016 when it was tasked with managing the Democratic National Committee's now-infamous security breach. Alperovitch told Inc. at the time that the attack was a signal to all businesses: Hackers and spies from Russia and other countries were breaching networks all over the U.S. "Assume they are inside your network," Alperovitch said.
Today, CrowdStrike competes directly with McAfee, Inc. 2016 Company of the Year contender Cylance (which was also founded by ex-McAfee employees), Symantec, and more. It will be the second cybersecurity company to go public this year--Tel Aviv, Israel-based Tufin started trading on the New York Stock Exchange in April at $14 per share.
Smartphone company Blackberry bought Cylance for $1.4 billion in November, leading many to believe CrowdStrike could be an equally lucrative acquisition target. Instead, Kurtz made it clear that an IPO was his ultimate goal. "We can go out today if we wanted to go out," Kurtz told MarketWatch in July. "This isn't years out."