Banking

Here’s why hedge fund titan Dan Loeb, famous cybersecurity expert Chris Krebs, and Ashton Kutcher are betting big on AI startup SentinelOne’s IPO

  • Cybersecurity startup SentinelOne is going public Wednesday, aiming for an $8 billion market cap.
  • The startup’s CEO told Insider he sees a “huge opportunity” to combine AI, cybersecurity and data. 
  • Cybersecurity leader Chris Krebs is an advisor, and hedge fund titan Dan Loeb is a major investor. 
  • See more stories on Insider’s business page.

Today’s initial public offering for SentinelOne may look like just another in a long line of geeky cybersecurity IPOs. But CEO Tomer Weingarten says it is just the beginning as his booming, 1,000-person Silicon Valley company pulls together cybersecurity, artificial intelligence, and data management.

And some very big names are buying into that vision.

SentinelOne advisor Christopher Krebs, the cybersecurity official who stood up to President Donald Trump on election security, is a believer. And hedge-fund titan Daniel Loeb is a major investor in the company.

TechCrunch reported on Tuesday that SentinelOne is aiming for a valuation as high as $10 billion in its market debut, and that it seeks to raise about $1 billion. That would be a significant surge from the $3.1 billion it was said to be valued at in November.

Loeb’s Third Point Ventures owned a 10% stake in the company at the time SentinelOne filed its IPO prospectus, with other prominent backers of the company including Sequoia Capital, Insight Venture Partners, Tiger Global, and actor/investor Ashton Kutcher.

Weingarten believes his cloud-based security company – which leans heavily on artificial intelligence to fight off hackers – could pull together cybersecurity, AI, and data analytics in a new way that marks a change in enterprise technology.

Right now, enterprise tech often experiments with artificial intelligence; collects data that it uses for specific needs, such as marketing; and applies cybersecurity solutions to protect its enterprise. The three areas are effectively separate. Weingarten told Insider the three are converging, and SentinelOne wants to be there waiting. 

“A lot of security companies just want to be good security companies,” Weingarten told Insider on the eve of the IPO Tuesday. “We have always had a little different DNA.” 

There is a “tectonic shift” in the tech world just beginning, Weingarten says, pulling cybersecurity, the AI it increasingly depends upon, and the data it protects together. To that end, SentinelOne acquired data analytics firm Scalyr in February for $155 million to pursue new approaches, and he said at the time, “we want to look beyond cybersecurity.”

“The company doesn’t really want me to talk that much about that part of the equation, to be honest. But it is a massive opportunity for us,” he said at the time.

Krebs agrees, saying he joined his first company since leaving the Cybersecurity and Infrastructure Security Agency because the market for cloud-based AI cybersecurity is “massive” and “going to go crazy.”

“It’s just a good opportunity,” the former director of the CISA told Insider. Cybersecurity AI like SentinelOne’s is “the easiest path to success for for most organizations. And look, I’m not even talking just small and medium businesses, but federal government agencies with massive stakes.”

Weingarten said President Biden’s recent executive order on modernizing federal cybersecurity could be “a huge opportunity.” Having American cybersecurity’s most famous name onboard couldn’t hurt. 

Loeb, another famous name, cited SentinelOne as the second-best-performing investment last quarter for his legendary investing firm. Loeb’s fund first invested in SentinelOne at a $73 million valuation, and the startup could go public at a $10 billion valuation on Wednesday. Kutcher first bought into SentinelOne in 2017, when it was valued at $210 million. 

Forrester analyst Allie Mellen, an expert in security and risk, said the bet on cybersecurity, AI, and data converging is “pivotal to where cybersecurity is evolving.” 

Mellen also said Krebs’ presence will help SentinelOne vie for government and business contracts and that Loeb’s involvement in the IPO signals that cybersecurity “is absolutely huge right now” in the investing world.  

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