Cybereason is seeking to sell itself because the cybersecurity software company can't pursue a near-term initial public offering (IPO), The Information reported. With a potential exit in mind, Cybereason has hired JPMorgan Chase & Co. to find a potential buyer for the cybersecurity business, the report said.
The alleged search for a buyer emerges roughly four months after Cybereason had layoffs in June 2022 and scrapped a near-term IPO plan that was seeking a $5 billion valuation for the business. The company's current target valuation is undisclosed.
Potential Cybereason Buyers: Private Equity Firms?
Many startup valuations have plummeted in recent months as some investors shifted their preference from hyper revenue growth to reliable profit growth. That investor mind-shift has made it extremely difficult for growth-first startups to explore IPO waters.
Rising interest rates and stubbornly high inflation have further pressured startup valuations and M&A deals.
Still, Cybereason has a large installed base and well-respected products. And some private equity firms remain well funded to potentially buy the security company. Potential names to know include:
- Thoma Bravo, owner of ForgeRock, Ping Identity, SailPoint Technologies, Proofpoint and Sophos.
- Insight Partners, which funded Kaseya's $6.2 billion buyout of Datto in mid-2022 and dominates the cloud backup/data protection investment market.
- Vista Equity Partners, which is acquiring KnowBe4 for $4.6 billion and also owns stakes in SaaS application management provider BetterCloud, and MDR service provider Critical Start.
Admittedly, we don't know if those private equity firms -- and/or others -- will give Cybereason a look.
Elsewhere, some cybersecurity firms are opting for debt financing as a bridge from today toward a potential IPO, more venture funding or strategic exit down the road. Example debt-related deals include:
- Arctic Wolf, a security operations platform provider, closed a $401 million convertible note offering in October 2022.
- Huntress received $40 million in debt financing from CIBC Innovation Banking in September 2022.
Cybereason Security Business, Partner History
Cybereason, founded in 2012, is based in Boston, Massachusetts. The company has 1,132 employees listed on LinkedIn.
Cybereason competes against dozens of security companies, including CrowdStrike and SentinelOne — two fast-growing EDR (endpoint detection and response) software companies that have a growing base of MSP and MSSP partnerships.
Cybereason was very active building MSP and MSSP partnerships from about February 2021 through January 2022. But much of the channel and partner effort quieted down after the June 2022 layoffs.
Still, R&D milestones continue. Recent developments include a Cybereason MDR mobile app.
MSSP Alert has not independently confirmed The Information's report.
