New IPO Filing Sentinel One $S Endpoint Cybersecurity Vendor

$S Endpoint cybersecurity vendor SentinelOne filed for an IPO, likely to raise about $500M at about $8B-$10B valuation. The final numbers will be known in a few weeks.

SentinelOne Endpoint Protection Platform Features | G2

$S SentinelOne XDR platform antivirus technology provides autonomous real-time protection across all operating systems, including Windows, Linux, macOS, and cloud-native and containerized workloads. The endpoint protection is powered by distributed AI which resides both on devices as well as in the cloud for always-on, machine-speed protection.

$S SentinelOne was founded by Tomer Weingarten in 2013, and has its HQ in Mountain View, California. The company has raised over $700M and most recently raised $276M from Tiger Global at over $4B valuation.

$S SentinelOne has experienced massive growth in recent years, with sales jumping to $93.1M in 2020, +100.2% from $46.5M in 2019. Losses were $117.6M, or $3.31 per share, 53.6 percent worse than a loss of $76.6M, or $2.34 per share the year earlier.

International sales accounted for 30of% SentinelOne’s revenue.

$S SentinelOne sells its software via channel partners. Its two largest channel partners are France-based distributor Exclusive Networks and N.J.-based direct market reseller (DMR) SHI International. SentinelOne generated 19% of its revenue from Exclusive Networks and 13% of its revenue from SHI.

SentinelOne Singularity: AI-Powered XDR platform transforms enterprise  security - Help Net Security

$S SentinelOne’s main competitor is $CRWD CrowdStrike, which is much larger, but it also competes with $PANW Palo Alto Networks and $ZS ZScaler.

$S SentinelOne had over 4,700 customers in more than 80 countries, up 74.1% from more than 2,700 customers a year earlier. No single customer accounts for more than 3% of SentinelOne’s revenue.

Metrics and Analysis

While the final valuation and numbers are not known, assuming it is growing at 100% and will be $200M+ in 2021, I think the implied valuation or 40X – 50X NTM revenues is rich, but this is in a very hot space (Cybersecurity) and the market is willing to pay for high growth companies.

I still like $CRWD Crowdstrike a lot, $ZS ZScaler and $OKTA Okta in the Cybersecurity space, so I will likely not initiate a position for 3-6 months.