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Report: Carbon Black Files For IPO As Endpoint Security Market Continues To Heat Up

The report, by the Wall Street Journal, did not offer an expected valuation for the company or an initial trading date.

In the latest sign of a booming market for endpoint security, Carbon Black has reportedly confidentially filed for its initial public offering.

The Wall Street Journal report, citing unnamed sources, said the Waltham, Mass.-based security vendor recently filed for the IPO with the U.S. Securities and Exchange Commission (SEC) confidentially, a process allowed for companies less than $1 billion revenue under the Jumpstart Our Business Startups Act of 2012. The report did not say the company’s expected valuation or initial trading date.

Carbon Black declined to comment on the reports in an email to CRN, saying it cannot comment on ’future financial plans.’

[Related: Carbon Black CEO Reaffirms Commitment To Channel, Talks Funding And IPO]

In an interview with CRN earlier this year, Carbon Black CEO Patrick Morley dodged questions on a possible IPO for the company, saying only that the "market is changing" in regards to venture capital funding and initial public offerings. He said Carbon Black was committed to using its funding to invest in its channel go-to-market strategy and providing "great products to help organizations around the world better protect themselves."

Carbon Black has been on a high-growth tear, capitalizing on an exploding market for next-generation endpoint security. According to a report by Enterprise Management Associates, Carbon Black holds 24.4 percent market share lead in that market by revenue and a 16.3 percent lead by software licenses sold. For the company, that has translated to 70 percent annual growth and more than $70 million in revenue in 2015.

The company has also attracted significant venture capital funding, most recently landing $54.5 million in Series F funding in October 2015. That round of funding brought the company’s total funding raised to about $174.5 million.

Partners are also seeing the opportunity around endpoint security. Mark Campbell, director of innovation research at Trace3, said endpoint security represents the ’next frontier’ of security, especially around next-generation technologies that have capabilities far above and beyond traditional anti-virus.

Carbon Black fits into a key portion of that market around endpoint detection and response, Campbell said, adding to a large market for endpoint protection platforms. While there are multiple competitors in the EDR space, such as CounterTack, FireEye, Cybereason, Crowdstrike and more, Campbell said the ’interest is great’ overall in the technology from customers and it remains to be seen who will win out in that space.

Carbon Black has been expanding its portfolio to extend beyond EDR, adding protection capabilities with its July acquisition of next-generation antivirus company Confer. The Confer acquisition adds to the threat protection and incident response capabilities the company previously had, capabilities that were brought together by the 2014 acquisition of Carbon Black by Bit9. The company had been known as Bit9+Carbon Black before it was shortened to Carbon Black earlier this year.

The IPO would mark the second major technology initial public offering in recent weeks, with hyper-converged infrastructure developer Nutanix completing its IPO in late September. However, it comes on a slow year of tech IPOs overall, though 2016 did also see the initial public offering of managed security services provider Dell SecureWorks in April.

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