Rapid7 Looks to Raise $80 Million in IPO

By Chris Lange Published Jun 26, 12:05PM EDT

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Rapid7 Inc. filed an amended S-1 form with the U.S. Securities and Exchange Commission (SEC) for its initial public offering (IPO). No terms were given in the filing, but the offering is valued up to $80 million. The company will list on the Nasdaq Global Market under the symbol RPD.

The underwriters for the offering are Morgan Stanley, Barclays, Cowen, Pacific Crest, William Blair and Raymond James.

It is worth mentioning that there has been an explosion of increasingly sophisticated cyberattacks as the proliferation of mobile devices and cloud-based applications and solutions relying on user credentials has eliminated the boundaries that previously defined an organization’s network perimeter and has expanded the threat surface that organizations must now defend.

Rapid7 is a provider of security data and analytics solutions that enable organizations to implement an active, analytics-driven approach to cybersecurity. The security data and analytics platform was purpose built for increasingly complex and chaotic IT environment.

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Rapid7 detailed in the filing:

As of March 31, 2015, we had more than 3,900 customers, including over 30% of the organizations in the Fortune 1000. We have experienced strong revenue growth with revenue increasing from $31.0 million in 2011 to $76.9 million in 2014, representing a 35% compound annual growth rate. We have strong visibility to our revenue as 53% of the revenue recognized in 2014 was recorded on our balance sheet as deferred revenue as of December 31, 2013 and 85% of the revenue recognized in the first quarter of 2015 was recorded on our balance sheet as deferred revenue as of December 31, 2014. We incurred a net loss of $32.6 million in 2014 as we continued to invest for growth given our large market opportunity.

The use of the proceeds from this offering was not explicitly explained in the filing. Rather the company said that it intends to use the proceeds in a variety of capital-preservation investments.

Note that cybersecurity firms have been a hot trend in 2015. Shares of FireEye, CyberArk and Palo Alto Networks have all gained at least 45% in 2015 alone.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.