Armis Security at a crossroads: IPO, capital raise, or strategic sale?

According to Armis Security’s leadership, the company is experiencing its strongest period since its founding. It is growing rapidly, and its three acquisitions over the past year are generating tens of millions of dollars in accelerated revenue. Recently, Armis conducted a secondary round for veteran employees at a company valuation of $4.5 billion and hired a senior cyber executive as the company’s president. Despite this momentum, internal discussions around private equity deals or major capital raises still point to a valuation of only $5 billion.

Armis raising hundreds of millions at over $5 billion valuation

Until about a year ago, discussing a $5 billion deal in the cybersecurity industry would have seemed audacious. But the industry’s landscape has changed dramatically, in part due to Wiz, which is in the advanced stages of a $32 billion sale. This landmark deal shattered the previous glass ceiling for investments and acquisitions in the cyber sector. Many industry insiders now recognize that valuations previously considered “high hundreds of millions” must now be measured in billions.

The shift is visible across the sector. Capital raises of $50 million or more have become increasingly common, and every week, reports emerge of cyber companies securing substantial funding in early or later-stage rounds. Companies are receiving high valuations when they demonstrate growth, though not always at the scale that would justify multibillion-dollar valuations. For example, Sierra’s valuation recently jumped to $6 billion in a short period, with revenues still trailing those of companies such as Armis or Wiz.

Armis founders Yevgeny Dibrov and Nadir Izrael have experience navigating high-stakes exits. Before founding Armis, Dibrov worked at Adallom, founded by the team behind Wiz, which was sold to Microsoft. Both founders were involved in Armis’s first sale to Insight Partners and Google’s investment fund in 2020, valued at roughly $1.1 billion. Since then, Armis has grown substantially, positioning itself as one of the fastest-growing private cybersecurity companies in terms of revenue.

A valuation of around $5 billion could signal multiple realities: the company may not be as strong as publicly presented and might require a capital injection to continue independently; the planned IPO could be further away than anticipated; or the market itself may be imposing constraints, creating pressure for investors to realize returns.

In a letter to employees on Monday, Dibrov emphasized that Armis is currently experiencing its best period. While he did not confirm any ongoing transaction, he reassured staff that the company would communicate concrete developments when available.

Armis recognizes that the current environment represents the prime opportunity for major deals in the cybersecurity sector. With Wiz’s impending sale and CyberArk’s acquisition by Palo Alto Networks, the industry is increasingly thinking in terms of multibillion-dollar valuations. Cybersecurity has evolved into a distinct market, separate from traditional high-tech, with its own investors, rules, and playbook.

In the coming days, Armis is expected to face critical decisions from its board of directors: whether to proceed with an IPO, pursue a significant capital raise that would relieve investors and employees of exit pressure, or opt for a strategic sale to a private equity fund such as Thoma Bravo.