Rapid7 Prepares to Set Price for IPO

Rapid7 Inc. is preparing to set the price for its initial public offering Thursday night. The expected price range is $13 to $15 for 6.45 million shares, with an overallotment option for an additional 967,500 shares. At the median price, this would value the total offering at roughly $103.85 million and the company as a whole at about $533 million. The company intends to list on the Nasdaq Global Market under the symbol RPD.

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

The company 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 an increasingly complex and chaotic IT environment.

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

According to Rapid7, its balanced and analytics-focused approach ultimately better secures organizations’ environments and reduces the likelihood of, and risks associated with, cyberattacks.

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Rapid7 noted in the filing that:

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 proceeds from this offering will be put toward working capital and general corporate purposes.