Armis Planning For IPO As Soon As 2024: CEO Yevgeny Dibrov

The ‘asset-centric’ cybersecurity firm ‘definitely will be ready’ for going public by the second half of next year, the Armis co-founder and CEO tells CRN.

IPO-Bound

Armis is stepping up its efforts to achieve readiness for an initial public offering and eyeing potential IPO timing as soon as the second half of 2024 , Co-Founder and CEO Yevgeny Dibrov told CRN Tuesday.

The company — a top provider of cybersecurity for IT, medical, IoT and OT assets — has previously made no secret of its aspirations to eventually go public. In connection with its most recent funding, a $300 million round in November 2021, Armis had received a valuation of $3.4 billion, placing the company among the top-valued cybersecurity “unicorns.” And in February of this year, Armis disclosed that its annual recurring revenue had surpassed $100 million, a key milestone for venture-backed tech vendors that are working up to an IPO.

But along with its expansion into a full cybersecurity platform provider, Armis is continuing to see surging growth and has a “clear path” to being cash-flow positive by mid-2024 — all of which suggests an Armis IPO is likely in the not-too-distant future, Dibrov said Tuesday.

“In terms of all the processes, numbers, everything that that basically we control — in the back half of ’24, we definitely will be ready [for an IPO],” Dibrov told CRN. “It could be early ’25. But we will be ready on our side, and we’ll choose the best time slot for us.”

The comments came as several major tech companies are reportedly looking to break the IPO drought in the industry. Reports suggest that chip designer Arm could begin trading as a public company as soon as later this week, while marketing automation firm Klaviyo and grocery delivery service Instacart have signaled their intentions to go public soon, as well.

Growth Momentum

On Tuesday, Armis also disclosed updates around its momentum, saying it has seen massive customer growth this year. For the first six months of Armis’ fiscal year, from Feb. 1 to July 31, the company grew its customer base by 80 percent, year over year, the company said.

Meanwhile, the company on Tuesday revealed new AI-driven enhancements to its “asset-centric” cybersecurity platform, which is now known as Centrix. The updates include the introduction of generative AI capabilities that will enable natural language queries on the Armis Centrix platform, according to Nadir Izrael, co-founder and CTO at Armis. The additional AI-powered functionality will be available for all four of Armis’ product categories — asset management and security, OT/IoT security, medical device security and vulnerability prioritization and remediation, Izrael said.

Armis executives spoke with CRN Tuesday during interviews at an Armis media event held at Nasdaq Marketsite in New York. Along with discussing IPO preparations, Dibrov also spoke about how Armis is widening its differentiation from competitors and creating opportunities for channel partners.

What follows is an edited portion of CRN’s interview with Dibrov.

With the launch of your new Centrix platform, what does it say about where Armis is focused at this stage?

A big part here is our move from a product company to a platform company. That was super significant. From an asset management perspective, [customers] want one single place to see every single asset. You cannot address just a specific environment because it’s about consolidating data from different sources. They don’t want one solution for their OT environment, then another solution for asset management, and another solution for vulnerability prioritization. So we said, “How can we build one platform that can address those needs?”

The amount of data that we are getting into the system allows us to really be the foundation of [customers’] cybersecurity program. [Centrix spans] from the asset management and security, and the gap analysis IT hygiene use cases, to securing the OT/IoT building management systems environment, to helping prioritize vulnerabilities from every single environment. All assets are here. We understand the context of every asset. Then we can really be in the best position in the world to prioritize vulnerabilities, understand the context and what they should remediate first.

We tackled the big problem. We didn’t go and say, “OK, let’s go into [security for] oil and gas. Just do oil and gas protection” — which is way easier. You don’t need to be able to be prepared for any environment, anywhere in the world. But that was always our approach. And that was something that further differentiated us. And right now, announcing this platform really helps us differentiate from organizations like Claroty or Axonius, or Palo Alto [Networks] in the OT, and Microsoft with their CyberX acquisition.

How would you summarize what your biggest differentiator is from competitors at this point?

We’re born in the cloud. For solutions that have been on-prem for many years, trying to add components or a management console — you can’t compete with the scale that cloud provides. You cannot compete with the ease of deployment. You cannot compete in terms of policies, and how when there is an attack that we catch in one one place, immediately all the engines are updated across the board, across every single place, without going physically to update those instances. That’s something major that we’ve focused on from the beginning.

Again, being a platform versus a point product [is an advantage]. Customers today want a platform — of course for cost reduction. But the biggest part is that when we are able to get data across different areas of the business, get data from the vulnerability information, application information, IT, OT — the platform becomes much more powerful. The policies that we are defining for the organization drive much better risk reduction when you’re a platform.

The amount of data that we are gathering [is another differentiator]. When we talk about AI, the AI-driven platform today is [powerful] because of the amount of data that we are getting. When you see the amount of data versus our competitors, it’s orders of magnitude [larger].

You’ve been open about your eventual goal of taking Armis public. Where is your thinking at right now about an IPO and the possible timing for that?

We’re definitely doing a lot of preparations from a company standpoint [for an IPO]. Again, there’s the move to be a platform, and there’s a lot of work that we’ve done from a financial standpoint on our profile, our efficiency. Efficient growth is something that we’ve focused on a lot in the last two years, and we’ve achieved really significant results. Basically [we have] a clear path to be cash-flow positive and get to profitability next year, somewhere in the middle of next year. This is something that will be a huge achievement for the company. And also great news for all our partners and customers — that we will own our destiny. We don’t need to raise money and we have a very healthy and growing and efficient business.

From an IPO standpoint, we’d look at this as an important milestone. We are not not in a rush. When the markets are in a good place and they’re open, we will be ready.

Is it possible you might be looking to pursue an IPO in 2024? Or even sooner?

It will all depend on the market conditions and [getting] the right valuations. But in terms of all the processes, numbers, everything that that basically we control — in the back half of ’24, we definitely will be ready [for an IPO]. It could be early ’25. But we will be ready on our side, and we’ll choose the best time slot for us.”

[If this was comparable to] the market of ‘21, we would have been public already, a few quarters ago — [thanks to reaching] $100 million in ARR and growing fast. The unofficial [IPO] requirements of today are [for a] much more significant and predictable business. And it’s not just about growth, but also efficiency. We’re coming back to the fundamentals — fundamentals that the business needs to be efficient, needs to generate cash. I think that it’s healthier to go public [with] $250 or $300 million in ARR. That is a significant, predictable business.

What’s the big opportunity for your channel partners right now?

For us, it’s all about channel right now. From a business standpoint, it’s channel-first. Today we do [at least] 90 percent of our business through channel. The goal is to be 100-percent channel and to engage [more] on the channel and alliances side. More work during the sales process and more work during the deployments are happening with our partners.

We are putting in really aggressive programs that can make it a huge win-win for [partners] — better margins for partners that do the end-to-end [deployments]. The only way for Armis to get to $1 billion in ARR is partnerships — from technology alliances to channel partners to regional partners. We’ve put a lot of great programs in place in order to make that happen. It’s a top priority [for Armis] and a top priority for myself personally as the CEO of the company.