Carbon Black Raising $152M as Tech IPOs Stage Comeback

Into the breach goes Carbon Black.

The Waltham, MA-based cybersecurity company said Thursday night that it is raising $152 million in an initial public stock offering by selling 8 million shares of its common stock at $19 per share. That gives Carbon Black an implied valuation of more than $1.2 billion.

Carbon Black said its stock is expected to begin trading on the Nasdaq exchange Friday under the ticker symbol “CBLK.” The IPO underwriters have a 30-day option to purchase up to 1.2 million additional shares, the company said in a press release.

The IPO price was at the high end of the $17 to $19 range Carbon Black gave in its most recent proposal to sell 8 million shares. That plan, disclosed in an SEC filing on Wednesday, was more ambitious than an earlier proposal to sell 8 million shares for $15 to $17 apiece—perhaps reflecting the stronger tailwinds for tech IPOs of late, particularly companies that sell software to businesses.

The public market debuts of Spotify (NYSE: SPOT) and Dropbox (NASDAQ: DBX) might have generated the most buzz, but the story of tech IPOs in 2018 has been more about enterprise software, not consumer tech. Other companies with IPOs this year include cloud software and services company Pivotal Software (NYSE: PVTL), business collaboration software firm Smartsheet (NYSE: SMAR), subscription software business Zuora (NYSE: ZUO), and cloud security provider Zscaler (NASDAQ: ZS). After more than two years of weak tech IPO activity, it seems the window has finally started to open. The number of tech IPOs this year (17, as of last week) is more than double the number at this time last year, Recode reported, citing Renaissance Capital data.

Now, add Carbon Black to the list. It’s the Boston area’s first tech IPO of the year, and it’s one that has been talked about for several years.

Founded in 2002 as Bit9, the endpoint-security company has raised more than $191 million from investors such as Accomplice, Highland Capital Partners, Kleiner Perkins Caufield & Byers, .406 Ventures, and Sequoia Capital. (Those five firms will remain the company’s largest stakeholders after the IPO, according to an SEC filing.) Bit9 changed its name to Carbon Black in January 2016, adopting the moniker of the San Antonio, TX-based company it acquired in 2014.

Of course, the journey doesn’t end with the IPO—in some ways it’s only beginning. The so-far unprofitable Carbon Black is entering new territory, as CEO Patrick Morley (pictured above) and his team attempt to fend off fierce competition (from the likes of Cylance and FireEye) while also pleasing Wall Street. We’ll see if the company is up to the challenge.

Jeff Engel is a senior editor at Xconomy. Email: jengel@xconomy.com Follow @JeffEngelXcon

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