Cohesity, the data management and security firm, completed the process of going public or offering an IPO in 2021 but postponed it due to challenging market conditions regarding inflation and troublesome stock market conditions in 2022. The scenario is different this year, as the stock market is soaring, driven mainly by tech stocks.
Hence, a data management company is among the appropriate startup companies the marketplace monitors. Sanjay Poonen, Cohesity CEO, confirms in the latest interview with Business Insider that when investment bankers find it relevant, the company can go public or stage an IPO. Companies often hire suitable professionals to deal with the tasks when they intend to do so. Recently, Cohesity announced it would employ Srinivasan Murari and Eric Brown as head of engineering and CFO (chief financial officer), respectively.
Regarding these factors, the Cohesity IPO has become a factor of significant interest to investors.
I. What is Cohesity
Cohesity is a data storage and management company that helps Government and non-government companies in a wide range of data-related sectors, including data recovery, backup, analytics, and more. The company's founder is Mohit Aron, a co-founder of Nutanix and a crucial figure in developing the Google File System. The headquarters of the Cohesity is in San Jose, California, and the founding period is 2013.
When founded, the company's primary goal was to solve data fragmentation issues, helping various organizations protect and back up their data within one platform while utilizing that data efficiently. The company provides its clients with software and integrated data management, recovery, and backup platforms across on-premises, cloud, and hybrid environments as the business model. The company usually determines fragmented secondary data (such as file shares, archives, and backups) simply by unifying it into a scalable, single system, which enables businesses to reduce the complicity of their data infrastructure, decreases costs, and defends from threats on data systems such as ransomware.
Cohesity's core services offerings for its clients include Data Protection and recovery, data backup and recovery, hyper-converged secondary storage, and cloud integration. The company's Helios platform usually offers AI-driven insights and centralized management, enabling users to use a single interface for worldwide data management. Among the company products, Cohesity SmartFiles and Cohesity DataProtect, respectively used for efficient files and object services and enormous recovery and backup.
Cohesity provides a wide range of services to various sectors, including healthcare, the public sector, technology, and financial services. Prominent clients include Hyatt, Brown University, NASA and AutoNation. The company's ownership remains privately owned primarily by early investors, founders and equity firms, and significant investors like Google Ventures, Sequoia Capital, SoftBank Vision Fund and others back it.
II. Cohesity Financials
Cohesity reaches among the leading companies in cloud storage and data management. The adoption surge in modern data protection supports the company's financial growth, but the exact revenue number has not always been disclosed publicly due to private ownership.
The company's revenue growth is attractive and significantly propelled by the expansion of Cohesity in various sectors, such as data security offerings, multi-cloud environments, and innovative data management platforms.
Cohesity Revenue Growth, Profitability and Margin
Cohesity remains among the fastest-growing companies in the data management industry.
Cohesity's revenue increased 26% in its latest year to $549 million. The company recently acquired Veritas' data protection unit, which helped to generate a revenue of $1.6 billion.
Although the company has $2 billion in debt, its free cash flow in the fourth quarter suggested a positive outlook.
Revenue growth for the company is driven mainly by the robust demand for modern data management solutions, precisely backup solutions and data recovery. The company's capability to deal with multi-cloud data management and ransomware makes Cohesity an attractive choice for many significant organizations. As a rapidly growing tech company, Cohesity primarily focuses on expanding market reach and scaling the platform, which somehow means reinvestment rather than getting immediate profitability. So, the continuous expansion of the customer base suggests potential increased profitability in the future.
The company rapidly expands in product development, marketing, and sales to ensure its solid presence among the data management industries. Currently, the short-term margin offerings are likely compressed for Cohesity, but in the longer term, it can gradually improve with operational efficiency and business scales, so there is a clear path in the upcoming years.
Key Financial Metrics
Cohesity has over 3000 enterprise customers across various sectors, including healthcare, education, finance, and government.
Cohesity has already created a strong partner network of over 750 partners, including well-known giant technology companies such as Microsoft Azure, Google Cloud, Amazon Web Services (AWS), and others. These partners allow Cohesity to integrate its platform with significant cloud providers offering endless multi-cloud environment solutions.
Cohesity's Helios platform offers ransomware protection and advanced AI-powered data management, rapidly becoming popular and gaining massive adoption. The number of organizations using this platform to protect and manage data is increasing frequently. Helios usually simplifies complex data management processes, which is an attractive feature for cloud and on-premises business clients seeking scalability, efficiency, and security.
Cohesity boasts a significant share in the data management and cloud storage sectors, competing with major players such as Commvault, Dell EMC, Veeam, and Rubrik. Although the exact market share percentage is not currently available, the company is expanding its customer base in both on-premises and cloud data management, which is a significant indicator of its strength in the industry.
The demand for scalable, secure, and efficient data management solutions is rising rapidly, so Cohesity is well-positioned to capture market share. The company currently focuses on providing services to various concerns regarding ransomware protection and data management in on-premises, multi-cloud, and hybrid environments.
III. Cohesity IPO: Opportunities & Risks
A. Profitability Potential & Growth Prospects
Industry Overview
When it comes to data storage and management companies, Cohesity's IPO is an attractive choice for investors. The company is expanding and making impressive progress due to increasing demand for its services.
The company filed for IPO confidently in 2021 but missed that, like many other start-up companies, due to troublesome market conditions in 2022. The following year, 2023, was the recovery period for IPOs, whereas the volume should surge in 2024. Cohesity hired a new CFO last year with significant experience in finance management in public companies. Cybersecurity competitor Rubrik is among the top candidates for 2024; if it conducts an IPO successfully, Cohesity is the next. Based on the report released in Mar 2021, the company's valuation was $3.7 Billion.
The demand for data management is increasing rapidly as the global dependency on data storage increases, which has led to currency switching to AI-powered cloud-based data management solutions. A recent industry report reveals that the data management market valuation is anticipated to increase to $137 by the end of 2027, with cloud management as a significant fundamental portion. Cohesity has a solid foundation as it provides various services, including cyber security, data protection, cloud management, backup, and data recovery.
Competitive Advantages
Cohesity has already established itself as a significant player in the data management industry. Its prominent competitors include Veeam, Dell EMC, Rubrik, and Commvault. The central positive factor to compete is that Cohesity has a comprehensive platform to combine data management, backup, recovery, and data protection across both cloud and on-premises environments. The Helios platform from Cohesity also offers AI-driven data management tools that enable businesses to manage complex data infrastructure further efficiently.
Additionally, as cyber security threats increase, ransomware protection is a crucial selling point for Cohesity. The company's ability to provide enormous data management services in different environments differentiates it from traditional data management providers. Again, innovation, exemplary customer support, and a user-friendly interface are positive factors for Cohesity to edge over competitors.
Future Growth Opportunities
Cohesity has several future growth opportunities regarding several factors such as,
- Data management has become one of the critical sectors. Cohesity has expanded its services to various organizations, such as technology, government, healthcare, etc. Some clients may have sensitive data and require advanced data protection and solutions that the company can deliver. The government and many of these organizations are increasing their investment in data management, so the future potential of Cohesity is bright.
- The development of AI-powered data management from Cohesity will help businesses manage complex data in a multi-cloud environment. These features will also attract clients who seek efficiency, scalability, and cost minimization.
- Cohesity has a strong partnership network with cybersecurity firms, software companies, and cloud providers like Microsoft Azure, Google Cloud, and AWS. This strategic partnership will help the company expand its functionality and platform reach. It will also enable opportunities to expand operations and be part of innovative features.
B. Weaknesses & Risks
The data management market is more extensive, and many significant players already have prominent resources in the industry. While the IPO of Cohesity holds potential for future growth, there are some negative or challenging factors that the company must overcome or the investors should consider when investing in Cohesity IPO, such as
- The market is more prominent and highly competitive as some established unicorns like Dell EMC or Veeam can outpace Cohesity in pricing or innovation, which may affect the company's growth.
- A global economic slowdown can cause businesses to cut data management budgets, negatively impacting Cohesity's income.
- Cohesity posted robust revenue growth, but consecutive profitability is not guaranteed as the company is heavily focused on reinvestment, which could exceed the margin and negatively impact Cohesity's growth.
IV. Cohesity IPO Details
A. Cohesity IPO Date
As of this writing, Cohesity has no exact Initial Public Offering (IPO) date. However, it has already become prevalent and attractive to investors since December 2021, when the market filed confidently for an IPO. The company raised a notable capital amount of $3.7 Billion, and many industry experts anticipate it may go public in the current year or the following year. The IPO date will be released officially after the company is completely ready for the IPO.
B. Cohesity Valuation
Following the last private funding round, which occurred in December 2021, the estimated valuation of Cohesity will be between $5 billion and $10 billion. At that time, it was $3.7 billion, which reveals the company's strong growth potential as it is also expanding services to provide cloud-based data management solutions.
With the surge in demand for data protection and security, the valuation can surge significantly by the time of the IPO. When the IPO occurs, several factors, such as revenue growth, investor sentiment, and market conditions, could impact the valuation amount.
Major Funding Rounds & Total Funding
Cohesity has raised a significant amount from the funding, and at the last time in December 2021, the total funding was $660 million. Here is the series of Cohesity funding rounds:
|
Series |
Year |
Amount |
Led By Organizations |
|
Series A |
2015 |
$15 Million |
Sequoia Capital. |
|
Series B |
2015 |
$55 Million |
Sequoia Capital, Wing Venture Capital, and Qualcomm Ventures |
|
Series C |
2017 |
$90 Million |
GV (formerly Google Ventures), Sequoia Capital and others. |
|
Series D |
2018 |
$250 Million |
SoftBank Vision Fund, Sequoia Capital, and new investors such as Cisco Investments. |
|
Series E |
2021 |
$145 Million (valuation to $3.7 Billion) |
DFJ Growth, with continued support from SoftBank Vision Fund and Sequoia. |
C. Share Structure & Analyst Opinions
The specific details on the number of shares to be offered for the Cohesity IPO program are currently unavailable. However, high-tech companies usually issue a substantial number of shares to raise capital for further expansion and progress. The initial anticipation of the valuation is around $5-$10 billion; the market capitalization will depend on the share number issued by the company and the share price.
Currently, there is no official investment report for the Cohesity IPO. Still, many industrial analysts see Cohesity as a high-potential tech company due to its rapid progress and strong position in the data management industry. Analysts highlight Cohesity's services, such as data security, cloud integration, and AI-driven data management, as the key drivers or positive factors to help the company post robust future growth.
V. How to Trade Cohesity IPO & Cohesity Stock
Getting Cohesity IPO Shares
Investors can easily buy Cohesity IPO shares from a supported broker house. However, traders might need to pass a test to participate in the IPO, including completing a questionnaire, having an account, etc. Once these are approved, investors can easily buy IPO shares before the market launches.
Cohesity IPO Trading Strategies
Once a share is open for trading after an IPO, the main risk is not having enough data to analyze the past performance. In that case, technical traders prefer analyzing the intraday price, combining with growth perspective from fundamentals.
In post-IPO trading, some popular strategies are momentum-based strategies, Moving average-based strategies, and candlestick-based strategies.
Ways to Trade Cohesity Stock
Among various trading opportunities, the safest way to participate in Cohesity stock is through ETFs. ETFs or Exchange Traded Funds track the price movement of a particular stock or indices and move like that particular instrument. Traders can easily buy and sell ETFs, eliminating the barrier to buy the actual share.
Another approach to buying Cohesity shares would be options trading. The ideal approach is to have the right to buy or sell a stock at a particular price.
Among all strategies, the most common and consistent approach would be CFDs trading. The greatest benefits of trading Cohesity stock would be the use of leverage, lower trading costs, the ability to open long and short trades, and one-click trading.
Brokers like VSTAR offer CFD trading, which would be a great choice to trade Cohesity stock CFDs in a secure, fast, and sophisticated trading environment.
