Rubrik's up to US$713m NYSE IPO has drawn strong demand ahead of books closing later on Tuesday and pricing late Wednesday, prompting the banks to guide investors to expect pricing at the high end of the range.
The offering of 23m shares at US$28-$31 is heavily oversubscribed, syndicate bankers and buyside sources said.
The 15-firm syndicate led by Goldman Sachs, Barclays, Citigroup and Wells Fargo told accounts earlier on Tuesday the offering had seen strong conversions from meetings with mutual funds/long-only investors, pointing to wide participation in the first US software IPO of the year and only the second since late 2021.
The syndicate expects the offering to price at the top of the range, though some sources have not ruled out above-range pricing.
The shares are expected to begin trading on the NYSE under the symbol "RBRK" on Thursday.
The terms give the company a fully diluted market cap of up to US$6.45bn, or an enterprise value of roughly US$6.2bn, versus US$627.9m of revenue in the year ended January 31 2024.
According to syndicate bankers, Rubrik is coming to market at a forward EV/sales multiple of roughly six times, a three-turn discount to the blended average of a large peer group including premium names CrowdStrike and Cloudflare.
Yet the company, founded in 2013 and now serving 6,000 customers, made a net loss of US$354.2m last year.
Bankers are hoping investors will instead focus on Rubrik's 47% growth in subscription revenue, but about 60% of this growth came from existing customers migrating from perpetual licences to its cloud product. Because of this, Rubrik's overall top-line grew only 5% last year.
Rubrik is the first US software IPO since September when automation firm Klaviyo's US$576m IPO priced above range and then traded poorly. Klaviyo shares remain more than 20% below its IPO price, dragged down by disappointing guidance in November in its first quarterly report since listing.
In 2021, Rubrik forged a strategic alliance with Microsoft that included an equity investment at a US$4bn valuation.