SailPoint, a leading identity security company, has successfully relaunched its initial public offering (IPO) on the Nasdaq, pricing its shares at the top end of its target range and raising a significant $1.38 billion. This marks a notable return to the public market for the company, previously taken private by Thoma Bravo in 2022. The successful IPO signals a potential resurgence in the tech IPO market for 2025.
SailPoint’s IPO pricing valued the company at $12.6 billion, positioning it as a major player in the identity management sector, closely trailing competitor Okta, currently valued at $16.8 billion. This strong valuation reflects investor confidence in SailPoint’s growth trajectory and profitability potential. In a recent interview, SailPoint founder and CEO Mark McClain highlighted the company’s appeal to investors seeking “growth at scale with profitability,” a combination that resonated strongly during the roadshow.
This isn’t SailPoint’s first foray into the public markets. The company previously held an IPO in 2017, around the same time as Okta. While the initial IPO saw a modest first-day gain, the company’s current return reflects significant growth and maturation. Thoma Bravo’s acquisition of SailPoint in 2022 for $6.9 billion underscores the company’s enhanced value proposition.
Today, SailPoint boasts a stronger financial profile, projecting annual recurring revenue between $875 million and $877 million for the year ending January 31, 2025, representing a substantial 41% year-over-year increase. While the company hasn’t released specific bottom-line guidance, its transition to a software-as-a-service model contributes to its improved financial performance. Despite reporting a net loss of $235.8 million for the nine months ended October 31, 2024, McClain emphasizes the company’s non-GAAP profitability.
Post-IPO, Thoma Bravo will retain significant influence, owning approximately 88% of SailPoint and retaining control over board decisions. This structure designates SailPoint as a controlled company.
SailPoint’s successful IPO could be a bellwether for the 2025 tech IPO market. Experts anticipate a surge in IPO activity this year, with prominent companies like Stripe potentially going public, fueled by a potentially more favorable regulatory environment under the new presidential administration. Renaissance Macro forecasts a “banner” year for IPOs, projecting 155 to 195 companies raising between $40 billion and $55 billion.
McClain suggests a perceived shift towards a less stringent regulatory landscape might contribute to this positive outlook. This sentiment aligns with the observed improvement in the IPO market in 2024, which saw a 38% increase in IPO numbers and a 48% rise in proceeds, according to EY. The average aftermarket performance for US IPOs raising over $50 million was a robust 30%. In total, 176 US IPOs generated $33 billion in 2024.
In conclusion, SailPoint’s successful IPO signifies not only a significant milestone for the company itself but also potentially signals a vibrant and promising 2025 for the broader tech IPO market. The company’s strong financial performance, coupled with anticipated regulatory changes and a positive market sentiment, positions SailPoint for continued growth and success in the identity security space.
