Cloud security startup Zscaler opens at $27.50, a pop of 72% on Nasdaq, raising $192M in its IPO
The first big tech IPO of the year has opened with a bang. Zscaler, a security startup that confidentially filed for an IPO last year, started trading this morning as ZS on Nasdaq at a price of $27.50/share.
Context & Ripple Effects
Zscaler's debut caps a fast run through the public-markets pipeline: Reuters reported in mid-2017 that the company would hire banks for an IPO at a valuation of about $2B, and by October it had confidentially filed with plans to go public before year-end. The confidential route kept pricing expectations quiet until this morning's open at $27.50 on Nasdaq — a 72% pop over the IPO price and $192M raised, making it the year's first big tech listing.
First-order effects
- Zscaler converts its ~$2B private valuation into a public one near double that within hours of trading, handing employees and pre-IPO investors immediate paper gains and the company a fresh $192M war chest.
Second-order effects
- A first-day close of $33 — up 106% per the next morning's coverage — hands underwriters and other late-stage cloud security startups proof that public buyers will pay up for subscription security revenue, pressuring comparable private companies toward their own filings.
Third-order effects
- The arc from confidential filing to a doubled valuation in months becomes a template for how enterprise software companies reach the public market — and, as Zscaler's later quarters show, staying there requires beating estimates every quarter once the pop premium is spent.
The trend: Enterprise security companies are moving from venture-backed privates to public listings via confidential filings, with opening-day pops serving as the market's verdict on subscription security models.