This Security ‘Unicorn’ Raised $116 Million in an IPO Priced Below Its Last Valuation

ForeScout Technologies, a cybersecurity firm based in Santa Clara, Calif., raised about $116 million in an initial public offering last night.

ForeScout listed 5.28 million shares—more than the 4.8 million originally anticipated—on the Nasdaq exchange at $22 a piece, the higher end of its $20 to $22 price range. The debut yielded an initial market cap of $806 million for the company, less than the $1 billion private valuation it attained as part of its last fundraising round in January 2016.

The number of “unicorn” startups—industry jargon for private companies with a valuation of $1 billion or more—has rapidly ticked upward in the past couple of years. Other so-called unicorns in the cybersecurity industry include Duo Security, which raised $70 million at a $1.17 billion valuation (including the capital raised) earlier this month; Tanium, last valued at $3.75 billion; and CrowdStrike, last valued at about $1 billion.

Okta, a digital identity manager once regarded as a cybersecurity unicorn, held a successful IPO in April. Since then, its stock price has risen to $28 a share, a gain of 20%.

ForeScout sells appliances that allow IT staffers to monitor and manage the devices on a network. The company began life 17 years ago, making it a relatively old business in an industry dominated by young upstarts.

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While still a successful IPO (given the demand for extra shares and higher-end pricing), ForeScout’s shortfall of investor expectations means that the company has to issue additional common stock to Wellington Management, which led its most recent round of investment, as Axios has noted. Earlier investors’ shares will suffer dilution.

In his first interview following the company’s public debut, Mike DeCesare, ForeScout’s CEO and a former exec at the antivirus maker McAfee, tells Fortune that he wasn’t too concerned about the so-called “down-round IPO.” He brushes off the question, saying, “We don’t even barely pay attention to that. The market we’re going after is so big.”

DeCesare is banking on an explosion of “Internet of things” devices set to enter corporate networks as the propellant for ForeScout’s growth for years to come. He says the company’s tech can help organizations prevent their Internet-connected webcams, printers, mobile devices, computers, and other sensors from getting roped into zombie armies like last year’s Internet-crushing “Mirai” botnet and the more recent Reaper one.

“We’re very confident that things will take care of themselves over time,” he says.

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