ForgeRock Files for IPO | Identity and Access Management

ForgeRock Files for IPO, Signaling Growth in Identity Management

ForgeRock submitted its Form S-1 to the Securities and Exchange Commission (SEC) today, marking a significant advancement toward its initial public offering (IPO).

IPO Details and Valuation

The company has not yet disclosed the initial price range for its shares, which are slated to be traded on the New York Stock Exchange under the ticker symbol FORG. Morgan Stanley and J.P. Morgan Chase & Co. are leading the IPO.

According to reports from Bloomberg, the company’s valuation could reach as high as $4 billion. This represents substantial growth compared to the $730 million post-money valuation determined by PitchBook following its previous funding round in 2020.

The Growing Importance of Identity Management

The increasing frequency of cybersecurity breaches targeting organizations of all sizes underscores the critical need for robust user identity security and management. San Francisco-based ForgeRock has secured $233 million in funding through several investment rounds.

Their most recent funding round, a $93.5 million Series E announced in April 2020, was spearheaded by Riverwood Capital and Accenture Ventures. At that time, CEO Fran Rosch indicated to TechCrunch that this round would precede an IPO. Former CEO Mike Ellis similarly suggested an IPO following the $88 million Series D round in September 2017.

Financial Performance and Market Opportunity

ForgeRock’s S-1 filing reveals an annual recurring revenue (ARR) of $155 million as of June 30, demonstrating a 30% year-over-year increase.

The company is also experiencing narrowing losses, reporting a net loss of $20 million, down from $36 million the previous year. The total global addressable market for identity services is estimated at $71 billion, indicating considerable potential for expansion.

Competitive Landscape

ForgeRock operates within a competitive market, facing rivals such as Okta, which went public in 2017 and has seen continued growth. In March, Okta acquired cloud identity startup Auth0 for $6.5 billion, a move that garnered significant attention.

Ping Identity, another competitor, became a public company in 2019 and reported an ARR of $279.6 million as of June 30, representing a 19% year-over-year increase. Past acquisitions in the space include Duo Security, acquired by Cisco for $2.35 billion in 2018.

Industry Expert Commentary

“ForgeRock possesses a strong access management tool and remains a key player in customer identity and access management (CIAM),” stated Michael Kelley, senior research director at Gartner.

Kelley highlighted that ForgeRock transitioned its core access management services to a SaaS delivery model in 2020, aligning it with the broader market trend. The company also expanded into identity governance, introducing a new identity, governance, and administration (IGA) product last year.

Unique Product Offerings

“One particularly noteworthy product offered by ForgeRock is ForgeRock Trees, a no-code/low-code orchestration tool designed for building intricate authentication and authorization workflows for customers, proving especially valuable in the CIAM market,” Kelley added.

Company History and Evolution

Founded in 2010, ForgeRock’s origins trace back to an open-source single sign-on project called OpenSSO, created by Sun Microsystems in 2005. Following Oracle’s acquisition of Sun Microsystems in early 2010, several open-source initiatives were neglected, prompting former Sun employees to establish ForgeRock.

Over the past decade, ForgeRock has evolved beyond single sign-on to provide a comprehensive identity platform supporting consumer, enterprise, and IoT applications. The platform now encompasses identity and access management, as well as identity governance.

Scalability and Customer Base

ForgeRock emphasizes its platform’s scalability in its S-1 filing, noting its capacity to handle over 60,000 user-based access transactions per second per customer.

“As of June 30, 2021, we served four customers with 100 million or more licensed identities,” the S-1 states. “Our ability to address mission-critical needs in complex environments for large customers allows us to expand our large customer base and grow within each of them.”