FireEye made a debut on the public markets that any investor would be pleased to witness. In trading Friday, shares jumped $16 for the security company. In total it raised nearly $304 million, giving it a market cap of $2.3 billion.
The company debuted at $20 per share and closed at $36 on the NASDAQ Exchange, showing the confidence that investors have in security companies, one of the hottest sectors of the technology markets.
FireEye, founded in 2004, has a virtualization engine that sits on top of a company’s infrastructure, protecting it from attacks that may come through the web and email. Its dynamic virtual cloud analyzes incoming data, providing real-time intelligence to its customers. It does not use signatures, an increasingly out-of-favor method for protecting device and data centers from attacks.
It took some time for FireEye to rise from its promising beginning as explained in a post from Sequoia Capital today. Its virtualization technology could find attacks but nothing much more than what competitors could discover. But then in 20008 it began to focus on the web and email. Malware had arrived and companies needed better protection. FireEye showed its virtual engine could find attacks far more effectively than competitors.
Last November, the company hired Dave DeWalt, who had previously led Documentum and McAfee. In January, FireEye raised $50 million from Sequoia Capital, Norwest Venture Partners, Goldman Sachs, Juniper Networks and Silicon Valley Bank. The raise set it up for a hot IPO market, fueled by the concerns about the list of revelations about the NSA from Edward Snowden. Its stock was raised this week to a price range of $15 and $17 per share and then raised higher to $20 based upon demand.
With such high awareness about security, investors have been investing heavily in the sector over the past several months. Illumio this week raised $34 million for its security technology. Others that have made raises include CipherCloud, which raised $30 million in a B round led by Andreeessen Horowitz . Last August, Mocana raised $25 million in a Series D round. There are a number of others that have received investment and it can be expected the funding will continue to flow as venture capitalists look for the next security play with the potential of a company like FireEye.