CrowdStrike Holdings Inc., the cybersecurity company whose stock soared following its initial public offering earlier this month, has reaffirmed its commitment to the firm’s “critical hub” in Orange County.
Founded in Irvine in 2011, CrowdStrike (Nasdaq: CRWD) relocated headquarters to Sunnyvale in Silicon Valley in 2017.
The company still maintains a research and development center in the Spectrum area of the city, and the Irvine office still holds some key executives at CrowdStrike, whose products are designed to detect, prevent, and respond to security threats and attacks; and provide monitoring, cyber intelligence services, and big data analytics.
“Several of our executives, including myself, work out of our office in Irvine and [we] continue to support our local employee base and facilities,” Chief Operating Officer Colin Black told the Business Journal last week.
“Several months ago, we started building out an expansion as our Orange County employee count nearly doubled last year,” he said.
CrowdStrike said it currently has about 102 employees in Irvine.
The company said in regulatory filings pertaining to its IPO that it plans “to dedicate significant resources to research and development,” suggesting continued growth in Irvine.
Black, in a statement provided to the Business Journal, praised the area’s “great access to talent, a burgeoning tech community, and a plethora of opportunities for professional development for our employees.”
Wall Street Darling
The newly public company now has plenty of funds to support any local growth.
It went public on June 12, initially pricing its shares at $34, well above prior stated expectations that were in the $19 to $23 range.
Shares have since more than doubled to nearly $80; as of late last week it had a market value of about $14 billion. It’s among the best-performing IPOs of the past year.
The company’s current valuation would make it No. 4 among OC-based public companies.
Black’s stake in the company was worth about $45 million as of last week, according to regulatory filings. He joined the company as chief information officer in 2015; prior roles included a position at Newport Beach chipmaker Mindspeed Technologies.
CrowdStrike was co-founded by George Kurtz, former chief technology officer at McAfee LLC; Dmitri Alperovitch, former vice president at McAfee; and Gregg Marston, former chief financial officer at Networks in Motion Inc. in Aliso Viejo. Marston retired in 2015.
The company has been on a huge growth path in recent years, in terms of funding and sales.
Revenue totaled nearly $250 million for the 12-month period ending January 31, according to regulatory filings. That’s up from $119 million and $53 million the two prior years, respectively.
It counts a roster of hundreds of government agencies and Fortune 500 customers, such as Sony and ADP, which pay a monthly subscription fee for cloud-based software services.
CrowdStrike’s competition includes anti-virus product providers, such as McAfee, as well as what it calls “alternative endpoint security providers,” such as BlackBerry Cylance, which operates out of Irvine.
Cylance co-founder Stuart McClure and CrowdStrike’s Kurtz established Mission Viejo-based Foundstone Inc. in 1999. The software maker, which specialized in detecting and managing software vulnerabilities, was sold five years later to McAfee in Santa Clara for $86 million in cash.
McClure and Kurtz—whose stake in CrowdStrike now is worth about $1.5 billion, regulatory filings indicate—published a book in 1999 with industry veteran Joel Scambray on cybersecurity, “Hacking Exposed,” which is meant to help companies protect themselves. The book’s seventh edition was published in 2012.
Local Competitors
Competition between CrowdStrike and Cylance is worth monitoring, according to one analyst.
Sam McBride, an investment analyst at New Constructs LLC financial research firm in Brentwood, Tenn., said markets view cybersecurity as a “winner-take-all” tech sector.
He said CrowdStrike may have the best technology and that helps to reinforce the company’s growing position in the industry.
“The more data you get, the more you can improve the product,” he told the Business Journal.
BlackBerry Ltd. completed its acquisition of Cylance for $1.4 billion in February, plus the assumption of some employee incentives.
Based on the soaring valuation of CrowdStrike, that deal now looks like a bargain for Waterloo, Canada’s BlackBerry.
BlackBerry officials said in early May that integration of Cylance was “off to a bright start and we’re very pleased with this acquisition.”
CrowdStrike grabbed a notable customer of Cylance earlier this year.
Dell, which in 2015 invested in Cylance’s $42 million Series C round, in January said it was shifting its endpoint security strategy to a combination of SecureWorks Inc. and CrowdStrike.
Dell was possibly Cylance’s largest customer, according to industry reports.
Whether CrowdStrike’s stock growth can continue is worth watching, analysts said.
“The valuation it has right now is pretty crazy,” McBride said.
