Zscaler, a US-based enterprise security software producer backed by internet and technology group Alphabet and computing equipment producer Dell, secured $192m in its initial public offering on Friday.
The company issued 12 million shares on the Nasdaq Global Market priced at $16 each, significantly above the $10 to $12 range it had set. Its shares opened at $27.50 on Friday and closed at $33.00, giving it a market capitalisation of almost $3.9bn.
Founded in 2007, Zscaler has built a cloud-based cybersecurity software offering that helps enterprises access any data or application securely from any mobile device. It has more than 2,800 customers around the world including 10% of the companies in the Forbes Global 2000.
The company had raised $148m in funding prior to the IPO, including a $110m series B round in 2015 that valued it at more than $1bn.
The 2015 round was led by TPG Growth and included Alphabet unit CapitalG, which invested $25m, as well as EMC, now a subsidiary of Dell, and Lightspeed Venture Partners.
The only investor in Zscaler to own a share of the company sized at more than 5% pre-IPO was TPG Growth, a subsidiary of private equity group TPG, whose stake was diluted from 8.7% to 7.8%.
Underwriters Morgan Stanley, Goldman Sachs, BofA Merrill Lynch, Barclays Capital, Deutsche Bank Securities, Credit Suisse Securities, UBS Securities, Robert W. Baird, BTIG, Needham & Company and Stephens have the option to buy another 1.8 million shares, lifting the IPO size to more than $213m.
Jay Chaudhry, Zscaler’s founder and CEO, said: “In the cloud-first world, network security becomes increasingly irrelevant.
“The goal is to securely connect the right user to the right application on any public or private network; this couldn’t be done with retrofitted legacy approaches, so we built a global security platform from scratch, 100% in the cloud.
“We are excited today to announce our listing on Nasdaq, an exchange that embodies innovation, which will further our mission to help organisations transform to the cloud so they can benefit from its scale and agility, securely.”