$3.7 billion data startup Cohesity prepares for a public listing, again, as hope rises that IPOs will return this fall

• Cohesity just hired a new chief financial officer and is talking about getting ready for its IPO.
• It filed confidential paperwork in December 2021, right as the markets closed to new offerings.
• “We continue to be in a state of public readiness,” CEO Sanjay Poonen said.

Cohesity, a data startup, is preparing to go public as soon as its bankers approve, according to CEO Sanjay Poonen.

This isn’t the first time Cohesity, which helps businesses store data backups on cloud services like Microsoft Azure and Amazon Web Services, has planned an IPO. But the timing couldn’t have been worse when it last announced it had filed confidential IPO paperwork, on December 21, 2021.

Rising inflation and interest rates, as well as fears of a full-fledged recession, slammed the tech IPO window shut before the startup could make its debut. The most recent high-profile IPO was HashiCorp on December 9, 2021, so the window has now been shut for 20 months and counting.

There are indications that the window will reopen next month if SoftBank spins off Arm in September, as the tech and banking worlds anticipate. If all goes well, IPOs could resume immediately and be hot by early 2024, with Cohesity hoping to be a part of it.

“I can’t predict the market, but, you know, if that happens, I’d say we’d be as ready as we were in 2021,” Poonen said.

He’s just waiting for his advisors to give him the go-ahead. “I would say we are still in a state of public readiness.” And as the market opens up, we’ll choose the best time, whether it’s in the fall or next year,” Poonen added.

To that end, Poonen, perhaps best known as VMware’s chief operating officer, hired Eric Brown as Cohesity’s chief financial officer (formerly of Informatica, Electronic Arts, and McAfee) and Srinivasan Murari as its head of engineering (most recently at Google Cloud and VMware) earlier this month.

Cohesity has also signed agreements with Google Cloud (an investor), Microsoft, and IBM for a new generative-AI product that can scan a company’s backups and do things like summarize all emails on a topic. It extended agreements with Cisco and Hewlett Packard Enterprise, both of which are investors. In addition, it released data from market research firm IDC indicating 29% annual revenue growth in 2022.

Cohesity, which was valued at $3.7 billion when it allowed employees to sell shares to investors on the secondary market in March 2021, hoped that year that its public debut would give the company a valuation of at least $5 billion — and possibly as much as $10 billion, according to Bloomberg. Cohesity has received $672.3 million in venture capital funding to date, with its most recent round of $250 million coming in April 2020.

Poonen refused to comment on his target market capitalization, other than to say that he wanted the “best” market capitalization, products, and growth in his market.

Poonen said he’s focused on profitability, in its most basic form, positive free cash flow, before opening Cohesity’s balance sheets to public scrutiny. Layoffs as recently as June were part of the journey. Cohesity claims to have 2,100 full-time employees.

“It’s old-school, but I’ve been in the tech industry a long time, and that’s how companies were built.” “Valuations were determined by free cash flow and future capital,” Poonen explained.

“I think people got giddy with growth,” he said after the 2008 financial crises subsided. “And there was so much money; interest rates were so low.” However, if you return to the fundamentals, it should be about profitable growth.”

Given how volatile the market has been, perhaps investors in 2023 and beyond will want all prospective public tech companies to demonstrate their ability to manage cash as well as predict growth.