Cybersecurity firm Netskope seeks $6.5 billion valuation in IPO bid

News that cloud security company Netskope was seeking a $6.5 valuation in its initial public offering (IPO) bid was generally a good sign for the cybersecurity industry, but some experts warned that it was not necessarily the beginning of a new funding wave for cybersecurity companies.

“Netskope’s IPO target shows there’s still appetite for strong cyber stories, but one deal doesn’t mean the market is back,” said Hank Thomas, co-founder and CEO at Strategic Cyber Ventures. “The bar is high and only companies with real growth, scale, and clear market fit will make it through this window.”

Reuters reported Monday that investors have supported companies like Netskope because of the rise in the number of cyberattacks, and the rapid shift to cloud platforms that have sparked fears of breaches and operational disruptions. Netskope competes with more established industry players such as Palo Alto Networks and Zscaler in the secure access service edge (SASE) market.

Longtime investor Bob Ackerman, founder, managing director and chairman at AllegisCyber Capital, said he thinks the trend line still favors the cybersecurity industry.  

"The gears are clearly beginning to turn for cyber liquidity with both IPO and M&A windows opening,” said Ackerman. “Companies like Netskope have achieved critical mass, and the public markets are reacting. There’s a deep pipeline of qualified cyber companies at scale, waiting in the IPO wings."

Or Eshed, chief executive officer of LayerX Security, said that Netskope’s IPO was less a signal of where the market is going than a reflection of where it was five years ago. Eshed said network security deployments got a big boost during the COVID work-from-home period, but adoption of network security solutions has already begun slowing because they don’t touch what really matters today: the last-mile of user activity.

“AI SaaS applications, AI browsers and AI agents are rewriting the risk surface directly at the endpoint,” said Eshed. “The real growth stories of tomorrow won’t come from legacy SASE solutions, but from technologies that secure this new frontier where work actually happens."