In a significant move within the cybersecurity industry, Netskope, a leading cloud-based security solutions provider, has enlisted Morgan Stanley to spearhead its preparations for an initial public offering (IPO) in the United States. According to sources familiar with the matter, the company is targeting a valuation exceeding $5 billion and aims to raise over $500 million through the IPO, potentially as early as the third quarter of 2025. This development signals Netskope’s ambition to capitalize on the growing demand for cybersecurity solutions and a stabilizing IPO market, positioning itself as a key player in the tech sector.
A Strategic Move for Netskope
Founded in 2012 and headquartered in Santa Clara, California, Netskope has emerged as a formidable competitor in the cybersecurity space, rivaling companies like Rubrik and Zscaler. The firm specializes in cloud-native security solutions, offering tools to protect organizations from cyber threats in an increasingly digital and cloud-reliant world. Its client roster includes prominent names such as retailer Ross Stores Inc. and Yamaha, reflecting its strong market presence. In 2021, Netskope was valued at $7.5 billion during a private funding round, though technology startup valuations have generally faced downward pressure since then due to market volatility.
The decision to pursue an IPO comes as Netskope seeks to enhance its brand visibility and fuel further growth. Chief Executive Sanjay Beri told Reuters in June 2024 that the company had been making internal preparations for a public offering, emphasizing that going public would amplify Netskope’s market reach and reputation. “An IPO is a natural step for us to grow awareness of what we do and continue scaling our solutions,” Beri noted. This strategic move aligns with a broader trend of tech companies looking to tap into public markets as investor confidence in the sector rebounds.
Why Morgan Stanley?
Morgan Stanley’s selection as the lead underwriter is a testament to its strong track record in guiding tech companies through successful IPOs. Over the past two decades, the investment bank has frequently ranked among the top firms for global tech IPOs, securing the number one or two spot in most years since 2004, according to data from Dealogic. Morgan Stanley’s expertise in navigating complex market conditions and its ability to attract high-profile investors make it a natural choice for Netskope’s ambitions. The bank’s recent involvement in high-profile tech IPOs, such as those for design software company Figma and advertising platform MNTN, further underscores its capability to lead Netskope’s public debut.
The choice of Morgan Stanley also reflects Netskope’s intent to position itself among the tech elite. The bank’s experience with cybersecurity firms and its robust network in Silicon Valley provide Netskope with the financial and strategic support needed to achieve a successful IPO. However, sources caution that the IPO’s timing, valuation, and fundraising goals remain subject to market conditions, which have been volatile in recent months due to factors like new tariffs and economic uncertainties.
The Cybersecurity Boom
Netskope’s IPO plans come at a time when the cybersecurity sector is experiencing unprecedented demand. With cyberattacks growing in sophistication—often fueled by artificial intelligence—businesses across industries are prioritizing robust security solutions. Companies like Palo Alto Networks and CrowdStrike have seen significant market success, with Palo Alto boasting a $121 billion market cap and CrowdStrike reporting a 23% year-over-year increase in annual recurring revenue. Netskope’s cloud-based security offerings, which focus on securing data and applications in cloud environments, are well-positioned to meet this demand.
The company’s solutions cater to a wide range of industries, from retail to manufacturing, helping clients safeguard sensitive data and ensure compliance with regulatory standards. As businesses increasingly adopt cloud technologies, Netskope’s expertise in secure access service edge (SASE) frameworks and zero-trust security models has made it a go-to provider for enterprises seeking to protect their digital assets. This market trend bodes well for Netskope’s IPO, as investors are likely to view the company as a strong contender in a high-growth sector.
A Rebounding IPO Market
The broader U.S. IPO market is showing signs of recovery after nearly three years of sluggish activity. In 2024, 176 U.S. IPOs raised $33 billion, and analysts expect 2025 to be a “banner” year, with an estimated 155 to 195 companies potentially raising between $40 billion and $55 billion. Recent successful tech IPOs, such as SailPoint’s $12.57 billion valuation and Rubrik’s stock doubling since its debut, have boosted confidence among companies and investors alike. Netskope’s IPO aligns with this trend, as firms like fintech giant Chime and trading platform eToro, which delayed their listings due to market volatility in April 2025, are now moving forward.
However, challenges remain. The tech sector has faced valuation headwinds since the high-water mark of 2021, when Netskope itself was valued at $7.5 billion. Market stabilization in recent weeks has provided encouragement, but uncertainties around interest rates, geopolitical tensions, and economic policies could impact investor appetite. Netskope and Morgan Stanley will need to carefully navigate these dynamics to achieve the targeted $5 billion valuation and ensure a successful public offering.
What’s Next for Netskope?
As Netskope prepares for its IPO, the company is likely to focus on strengthening its financial position and expanding its market reach. The funds raised through the IPO—potentially exceeding $500 million—will support investments in product development, global expansion, and marketing efforts to further elevate its brand. Netskope’s leadership is also expected to highlight its competitive edge in the cloud security space, emphasizing its ability to address emerging threats like AI-driven cyberattacks.
For investors, Netskope represents an opportunity to tap into the growing cybersecurity market, which continues to attract significant capital. The company’s established client base, innovative technology, and Morgan Stanley’s backing make it an attractive prospect. However, as with any IPO, success will depend on market conditions and Netskope’s ability to demonstrate sustained growth and profitability.
Broader Implications for the Tech Sector
Netskope’s IPO could have ripple effects across the cybersecurity and broader tech industries. A strong debut would signal continued investor enthusiasm for tech IPOs, potentially encouraging other startups to accelerate their public offering plans. It could also intensify competition in the cybersecurity space, as firms like Zscaler and Rubrik vie for market share. Moreover, Netskope’s focus on cloud security highlights the increasing importance of protecting digital infrastructure, a trend that is likely to shape investment priorities in the coming years.
As the third quarter of 2025 approaches, all eyes will be on Netskope and Morgan Stanley to see if they can deliver a blockbuster IPO. With the cybersecurity sector thriving and the IPO market gaining momentum, Netskope’s public debut could mark a pivotal moment for both the company and the industry at large.
Sources:
- Reuters: Cybersecurity firm Netskope taps Morgan Stanley for US IPO
- The Star: Exclusive-Cybersecurity provider Netskope taps Morgan Stanley for US IPO
- GuruFocus: MS to Lead Netskope’s IPO Preparations
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