Inside CrowdStrike's IPO
End-point security vendor reveals revenue dwarfs those of competitor Cylance in SEC filing
CrowdStrike has filed paperwork for its initial public offering (IPO) with the US Securities and Exchange Commission (SEC), revealing it will list on the Nasdaq market under the symbol ‘CRWD'.
The cybersecurity vendor, which was founded in 2011, said it hit sales of $250m (£195m) in the year ending 31 January 2019, up 125 per cent on the previous year.
Subscription revenue accounted for $219m of the overall figure, with the firm claiming to have more than 2,500 customers.
CrowdStrike said it primarily sells through a direct sales team that "leverages [its] network of channel partners to maximise effectiveness and scale". It called its sales approach "channel-centric".
The firm's reliance on the channel was highlighted by a breakdown of sales. One channel partner, referred to only as channel partner A, contributed 15 per cent of CrowdStrike's total revenue in fiscal 2019. The figure for the same partner was 22 per cent in 2017.
The vendor did not specify if this partner was a distributor (selling to resellers, etc) or a company selling to end users.
Profit figures are however not so impressive. For the same year as above, CrowdStrike saw net losses widen three per cent to $140m.
However CrowdStrike is optimistic that a recently penned partnership with Dell, which will see its Falcon platform become the PC maker's "preferred end-point security offering", will bolster sales.
In the SEC filing, CrowdStrike cites six cybersecurity vendors as its main competitors. Below, we have compared these businesses by revenue, excluding McAfee, which is private and therefore does not publish numbers, and Symantec, which would skew the table due to its $4.7bn sales.
Cylance's numbers were published when it was acquired by publicly listed BlackBerry.
Crowdstrike has raised $481m from six rounds of funding, according to Crunchbase, and claimed to have a valuation of $3bn last year.
By comparison, publicly listed Carbon Black has a market cap of $1.36bn, while Cylance was sold to BlackBerry for $1.4bn.
CrowdStrike is currently owned predominately by external investors Warburg Pincus (30.3 per cent) Accel (20.3 per cent) and CapitalG (11.2 per cent).
CEO and co-founder George Kurtz (pictured) holds just over 10 per cent.
Partner view
Last year CrowdStrike shook up its European channel, scrapping a two-tier model that had seen it briefly work with Cloud Distribution in the UK.
Adam Thornton, director of vendor alliances at Bytes, said that CrowdStrike has stolen a march on its next-gen competitors in the UK.
"They have become one of our top vendors in the last two years and because of that, 99 per cent of the time they will be included as part of our recommendation to a customer," he said.
"We looked at Cylance and Carbon Black a couple of years ago, but the partnerships with them were laboured and they certainly didn't support us in the same way that CrowdStrike has.
"[CrowdStrike] have done a good job at acquiring good talent in the UK channel, and specifically in the security channel, which has helped them get into a business-as-usual model very quickly."
Thornton said that the speed at which CrowdStrike works has been a key driver for the relationship, explaining that solutions can be up and running "in hours, not days".
He also said that Bytes is catering for a range of customers with CrowdStrike's technology - the smallest having 90 employees and the largest over 20,000.
Thornton added that CrowdStrike's $1m cyber-protection warranty has helped instil confidence in potential customers.
"That allows me to change the conversation," he explained.
"When we talk about cyber risk, the majority of our customers are taking steps to put protection in place. Many customers take their own insurance but we're able to say, not only have you got a vendor that stands behind the technology, if you do get hit they have their own insurance to help cover you.
"It sets them apart from 90 per cent of their competition."