Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: Sale Point is back on the market. The security company
Speaker 2: went public for the second time last week. The first
Speaker 2: time it went public back in twenty seventeen, before Toma
Speaker 2: Bravo took sale Point private in twenty twenty two. Tomo Bravo,
Speaker 2: of course, has been very much looking for this IPO
Speaker 2: market to open back up, and sale Point is a
Speaker 2: critical part of that. For more on the decision to
Speaker 2: go public again, we're joined by Mark McLain, sale Points CEO.
Speaker 2: When you spoke to our colleagues over here at Bloomberg News,
Speaker 2: you talked a lot about the use of proceeds, the
Speaker 2: grand ambition here about going public. At the end of
Speaker 2: the day, what do you think the first priorities are
Speaker 2: for you? Is it paying down that debt or looking
Speaker 2: for expansion opportunities.
Speaker 3: I think the primary was to pay down debt sally,
Speaker 3: but I think we see ourselves kind of as a
Speaker 3: long term growth business, so in some ways it was
Speaker 3: putting some fuel in the tank, as it were, and
Speaker 3: kind of getting ourselves ready for what we believe is
Speaker 3: a multi year growth opportunity. So yeah, it was kind
Speaker 3: of get the debt down to a manageable level and
Speaker 3: then get ready for future growth.
Speaker 4: I do want to talk about the timing a little bit,
Speaker 4: of course.
Speaker 5: This is your return to.
Speaker 4: The public markets. You listed on the New York Sock
Speaker 4: Exchange in twenty seventeen, then you went private when Toma
Speaker 4: Bravo acquired you in twenty twenty two. Now you're back again,
Speaker 4: which is a pretty quick turnaround.
Speaker 5: Just talk us through that, yeah, I think, to be honest, Katie.
Speaker 5: And by the way, just a piece of data.
Speaker 3: You probably know we were owned by Toma Ravo before
Speaker 3: the first IPO, which so it's a little bit of
Speaker 3: a back and forth thing.
Speaker 5: Not a terribly common story, I guess, but I think
Speaker 5: we were.
Speaker 3: Kind of, you know, when we did the go private
Speaker 3: in twenty two, thinking of a little longer timeframe to
Speaker 3: come back.
Speaker 5: And I think two things are true.
Speaker 3: One is we've been forced to have a very good,
Speaker 3: you know, amount of growth over the last few years
Speaker 3: and kind of shifted to a more profitable profile, so
Speaker 3: that kind of desirable scale growth profit profile that market's like.
Speaker 3: And then of course the markets have warmed up a
Speaker 3: bit obviously in the last three to four months.
Speaker 5: So I think it was.
Speaker 3: That combination of being ready, having kind of a hopefully
Speaker 3: attractive profile for the public markets, and then kind of
Speaker 3: ready to pull that trigger when the market started to
Speaker 3: warm up and we felt like the time was right
Speaker 3: to do that.
Speaker 6: You can tell your story mark with your growth, and
Speaker 6: you know Wall Street likes to see the numbers. But
Speaker 6: in terms of just the elevator pitch, I always find
Speaker 6: it so difficult to understand what these software solutions providers do.
Speaker 6: And in your notes it says you equip modern enterprise
Speaker 6: to seamlessly manage and secure access to applications.
Speaker 5: Like, what is that? What does that mean? How do
Speaker 5: you tell.
Speaker 6: Your butcher what your company does?
Speaker 3: I usually say my grandmother, but you know she's deceased,
Speaker 3: and probably the butcher is a better metaphor. I think
Speaker 3: at the end of the day, you know, there's what
Speaker 3: everybody does all day, every day, and they get this
Speaker 3: is they log into systems.
Speaker 6: Right.
Speaker 3: We all have a whole bunch of accounts and passwords,
Speaker 3: so everybody gets that concept.
Speaker 5: What sale Points focused.
Speaker 3: On is ensuring that in an enterprise amid to large
Speaker 3: scale enterprise where there might be tens or even hundreds
Speaker 3: of thousands of human identities.
Speaker 5: And now increasingly what we call non human.
Speaker 3: Identities you know think you know, software programs and now
Speaker 3: AI agents is all the rage. All those identities have
Speaker 3: access to systems and data, right, that's generally some kind
Speaker 3: of an account and a password. Well, keeping all of
Speaker 3: that accurate and what's called in the security realm least privilege.
Speaker 3: In other words, any identity should have exactly what they
Speaker 3: need or it needs to do with the.
Speaker 5: Job and no more.
Speaker 3: Well, keeping that accurate and adhering to security policy is
Speaker 3: really hard, and that's what big enterprises have struggled with
Speaker 3: because all those systems are from different vendors. Right, They've
Speaker 3: got Workday and Salesforce and Service Now and Microsoft Apps
Speaker 3: and Oracle and all kinds of stuff from twenty or
Speaker 3: thirty or fifty years of it. And getting all that
Speaker 3: to stay in sync and to be secure and accurate
Speaker 3: is a very hard problem. That's what sale points focused on,
Speaker 3: is the right access to the right data for every
Speaker 3: identity in their enterprise.
Speaker 6: I'm glad you bring up AI. I've been asking chat
Speaker 6: GPT to log in into some of my applications and
Speaker 6: do some stuff for me, right, rather than just answer
Speaker 6: stupid questions and so far it can't. Are you going
Speaker 6: to enable that kind of technology? How soon do you
Speaker 6: see that kind of thing being able to work?
Speaker 3: Well, there are some places you know your chat GBT
Speaker 3: Matt is doing this to you, as I guess it should.
Speaker 3: But I think at the end of the day, there
Speaker 3: is a sense that people want to automate and streamline
Speaker 3: things while maintaining security. And that's the tension, right, There's
Speaker 3: a there's a tension that's existed forever in the realm
Speaker 3: of technology, which is convenience and things go fast and
Speaker 3: easy is what business users want, and control and security
Speaker 3: is what kind of the protection mindset people want.
Speaker 5: Right, So there's always a tension.
Speaker 3: There, and AI is just in some ways the latest,
Speaker 3: maybe most dramatic iteration of Wow.
Speaker 5: Super cool tech.
Speaker 3: We can do a lot with this, we can accelerate
Speaker 3: our business, go do amazing things.
Speaker 5: And the security folks are going.
Speaker 3: Oh, tap the brakes, like, not sure exactly if we
Speaker 3: understand what access to what data is happening here and
Speaker 3: all these controls we put in place to protect our
Speaker 3: business and its information might be getting run over in
Speaker 3: that realm. So there's a tension there, and we're pretty
Speaker 3: early obviously in this dynamic, right, So we're one of
Speaker 3: the companies that's kind of in the thick of that
Speaker 3: with all these providers of business application technology and.
Speaker 5: LMS and AI models and.
Speaker 3: All that good stuff, and then these security professionals in
Speaker 3: these enterprises that are trying.
Speaker 5: To make sure they let their business succeed.
Speaker 3: But do so in a way that protects its information.
Speaker 3: And that's just a hard problem, and we're kind of
Speaker 3: at the center of helping big enterprises solve that problem.
Speaker 2: You know, Mark, on the show, we like to have
Speaker 2: our guests talk about their business but also about their
Speaker 2: market experience. And you've got a lot of credit here
Speaker 2: for being one of the first to market this year.
Speaker 2: Of course, this is an IPO market that a lot
Speaker 2: of investors have been waiting to open back up. The
Speaker 2: first week has been choppy. What would you say to
Speaker 2: people that are looking to go public right now?
Speaker 5: Is it a good time?
Speaker 2: Is the window really small?
Speaker 5: Frankly, that's a good question. We wrestled with it both.
Speaker 5: I will give you a little perspective.
Speaker 3: That you know, everybody's got their view of what's happened,
Speaker 3: even in our case for about a week now, right,
Speaker 3: I mean, we priced kind of between nineteen and twenty one.
Speaker 5: On the cover of the S one.
Speaker 3: We raised the filing range from twenty one to twenty
Speaker 3: three and priced at the high end of that rage
Speaker 3: and then upsized our offering. So we did a lot
Speaker 3: of things that kind of said we weren't set up
Speaker 3: for a big run up. We were focused on getting
Speaker 3: out at the right price in the market to kind
Speaker 3: of balance two things. Frankly, right, Toma Bravo, our primary owner, wants.
Speaker 5: Good liquidity out of the deal.
Speaker 3: And we want to set ourselves up for long term
Speaker 3: market success with a lot of the same long term
Speaker 3: investors at own sale point for five years in the
Speaker 3: market before, so there was some tension there. And again
Speaker 3: I like to say, if you're in my seat, you
Speaker 3: didn't do this for a one day pop or even
Speaker 3: a week pop. We're thinking months and years of business success.
Speaker 3: You know, I won't plan on necessarily this kind of multiple.
Speaker 3: We went public the first time at seventeen at a
Speaker 3: little over a billion. We sold to Toma Bravo less
Speaker 3: than five years later for seven billion.
Speaker 5: So we think we understand something.
Speaker 3: About how to grow once we're in the market, and
Speaker 3: we just don't focus on the day to day. My
Speaker 3: famous phrase I developed on our first public offering timing
Speaker 3: was to our own team internally. I said, look, every
Speaker 3: second you spend watching the stock price, you're doing nothing
Speaker 3: to help the stock price, right Like, watching stock movements
Speaker 3: day all day is what you all and a bunch
Speaker 3: of investors do. Our team's job is to go build
Speaker 3: great solutions and win in the market.
Speaker 5: And I always say, if we do.
Speaker 3: That well, the stock price will take care of itself.
Speaker 5: I hear what you're saying.
Speaker 4: If I were the CEO of a company, I would.
Speaker 5: Just stare at my stock price all day.
Speaker 4: So I really respect the discipline there. I do want
Speaker 4: to get your thoughts on the broader landscape, the broader
Speaker 4: competitive landscape, because you're the first cyber IPO in quite
Speaker 4: a while. I believe the last one was Rubric back
Speaker 4: in April. Do you think that your debut may encourage
Speaker 4: some of your peers to come out of the pipeline
Speaker 4: and test the public markets.
Speaker 3: I think there's and be on security cater but I
Speaker 3: think all around the market people have been kind of
Speaker 3: watching and waiting.
Speaker 5: Is it time to get back out there?
Speaker 3: And, like I say, depending on how close you are
Speaker 3: to our story. In our minds, we thought we were
Speaker 3: going to come out at the midpoint of our original
Speaker 3: finding range of twenty we've been trading in the twenty
Speaker 3: four to twenty five range. In our minds, that's great,
Speaker 3: and we think we're going to over time be able
Speaker 3: to move up from there if we continue to deliver results.
Speaker 3: So I think people were watching us, watching kind of
Speaker 3: the market receptivity. You know, can't comment on the volume
Speaker 3: or the level of this, but it was kind of
Speaker 3: reported that there was an over subscription thing here, I
Speaker 3: meaning there's a lot of interest in the investor world.
Speaker 5: I think the market, as you all know, has been
Speaker 5: hungry for some more IPOs.
Speaker 3: So I think there's an interest and they're looking for
Speaker 3: the right profiles of companies. And then I think back
Speaker 3: to your question a little more, Katie. I think at
Speaker 3: the end of the day, cybersecurity is still a very
Speaker 3: good market, right, if there's nothing else that's true. Everybody's
Speaker 3: very well aware we are far from solving this. Matter
Speaker 3: of fact, we will never solve cybersecurity, right. It's just
Speaker 3: a cat and mouse. There's going to be new ways
Speaker 3: of tackling it.
Speaker 5: You know.
Speaker 3: A very common question we get is AI good for
Speaker 3: you or bad for you? And I say yes, right,
Speaker 3: like welcome to cyber Right, it's going to be a
Speaker 3: tool that helps us do what we do better, and
Speaker 3: it's going to help the bad actors do what they
Speaker 3: do better. So we're just going to continue to be
Speaker 3: helping companies protect themselves against a set of bad actors
Speaker 3: Nation States, criminals, et cetera, that are trying to disrupt them,
Speaker 3: steal data, you know, et cetera.
Speaker 5: So I think.
Speaker 3: We're very confident that this is a great market. And
Speaker 3: then within that back to Matt's question of explaining this
Speaker 3: to your friend the butcher, right, identity is a very
Speaker 3: interesting subsector of security because it's probably the newest sub sector.
Speaker 3: Meaning for decades we've been working on network security and
Speaker 3: device security or endpoint security.
Speaker 5: We know names like Palo Alto, we know names like
Speaker 5: CrowdStrike and all that.
Speaker 3: Identity security is a relatively newer concept, right. There's a
Speaker 3: handful of names there, and the market got a little
Speaker 3: enamored with this single sign on thing, which is kind
Speaker 3: of all the rage of a decade ago, and that's
Speaker 3: an important piece. It's far from the comprehensive need though,
Speaker 3: that customers have to secure their enterprise and all its data.
Speaker 5: We're still maturing. We're still maturing in this market. All right.
Speaker 4: That's a good place to leave it. Mark, great to
Speaker 4: get some time with you. Hope to speak to you
Speaker 4: again soon. That is Mark McLean of Sale Point