SentinelOne today made its debut on the New York Stock Exchange, trading under the ticker symbol "S" in an initial public offering raising $1.2 billion – the largest cybersecurity IPO of all time, reports indicate.

The endpoint security firm priced 35 million shares at $35 each on June 29, Bloomberg reports. SentinelOne had initially expected its IPO price to range from $26 to $29 per share, which it increased on June 28 to $31 to $32 per share, for a marketed 32 million shares. With a price of $35 per share, the company has a market valuation of $8.87 billion, the report states.

This makes SentinelOne's IPO the highest valued in cybersecurity history, as CNBC points out.

The company filed for an IPO earlier this month. In its S-1 filing, SentinelOne disclosed 108% year-over-year revenue growth in the three months ending April 30, 2021, with an increase from $18 million to $37.4 million. Its customer base grew from more than 2,700 to more than 4,700 in the same 12-month time frame.

SentinelOne was founded in 2013 and has since raised $656.5 million in funding, according to Crunchbase. Last November, it raised $267 million in a Series F funding round that brought its valuation to more than $3 billion, triple its $1 billion valuation since its Series E in February 2020.

The energy around SentinelOne's IPO is "great validation of the security market," says Allie Mellen, Forrester analyst supporting security and risk professionals. "We've seen a lot of different aspects coalesce around this particular moment in security," she adds, pointing to several high-profile attacks, including SolarWinds and the ransomware attacks across industries.

Further, she adds, the recent security-focused executive order from the Biden administration highlights the importance of technologies such as analytics platforms and endpoint detection and response (EDR) – exactly the kind of technology that SentinelOne offers.

"This seemed like the last piece to really highlight how important cybersecurity has become and taken off in a global context," Mellen says of the company's IPO.

While it's certainly positive to see a stronger emphasis on cybersecurity, she notes, the high valuation has a downside: Organizations' security problems and concerns are growing worse, and investors are looking for solutions that can help address enterprise security threats.

Today's news indicates the cybersecurity market's growth has only strengthened. CrowdStrike, a SentinelOne competitor, had its IPO in late 2019 and raised $612 million ahead of its debut with an offering of 18 million Class A shares priced at $34 each. Despite CrowdStrike's strong message and impressive IPO, the momentum around EDR hasn't slowed.

EDR In The Spotlight. What's Next?
What does the SentinelOne IPO mean for other corners of the security market? Mellen says it largely depends on the technology. EDR has reached a point when startups founded in the early 2010s are now moving into IPOs.

"It's kind of a natural progression for them, but it also showcases how important EDR is," she explains. "As these vendors evolve into XDR solutions, I think it's just going to get more impactful and more interesting."

IPO-signaling companies are breaking out of their startup roles, and extended detection and response (XDR) is part of that. They require greater support to continue building out their product portfolios, Mellen adds. Overall, this move speaks to how EDR vendors are trying to push themselves to the center of the security operations center (SOC).

While still fairly new, she anticipates cloud security vendors will be having a similar moment in years to come as attackers set their sights on target cloud environments.

"I think one of the reasons we saw so much success with EDR vendors is the high-value telemetry you can get from the endpoint," Mellen says. 

Because attackers were primarily after enterprise data on the endpoint, that's where they were active and where security companies could collect the most threat data. Now, as attackers target data in the cloud, cloud security is a growing area of focus.