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"We're not for sale," reads the title of Rubrik's latest blog entry.
Rubrik CEO Bipul Sinha posted the blog Tuesday night to deny he is considering selling the data protection company. The blog was in response to an article published by The Information that claimed he had discussed a potential buyout with tech giants. The article cited two unnamed sources and didn't mention the timeframe of when the talks happened.
Sinha's entry on Rubrik's blog not only denied that Rubrik is for sale, but went on to discuss how well the company was doing. Rubrik was named a Leader in the Q3 2019 Forrester Wave and scored the highest on the evaluation's "strategy" scale. In terms of cash, the startup received $261 million in a Series E funding in January of this year, bringing its valuation to more than $3 billion.
Industry analysts say that a Rubrik sale wouldn't make sense right now.
"History has shown that any technology company could potentially be for sale, but I would tend to believe Bipul Sinha when he announced in no uncertain terms, 'I want to make it unequivocally clear that Rubrik is not for sale,'" said Steven Hill, senior analyst at 451 Research.
Naveen Chhabra, senior analyst at Forrester Research, said Rubrik has no strategic reason to sell because it is still growing and there's no value in selling now.
"I don't see any reason for Rubrik to sell," Chhabra said. "One of the fundamental reasons for selling is to generate value, to create additional channels to sell their product. They're already doing that by partnering with other vendors."
Christophe Bertrand, senior analyst at Enterprise Strategy Group, said the price tag would put most potential buyers out of range, making a purchase even less likely.
"Rubrik picked up $261 million earlier this year, which values them at more than $3 billion -- that's a pretty high price tag, which narrows the list of suitors," Bertrand said.
Chhabra pointed out that the roughly $3.3 billion valuation figure is just a starting point, and expected that a buyer would have to offer at least $4 billion to even be considered. He reasoned that investors want to get back more than they put in, especially with a company that's growing and showing potential for greater returns.
"I don't see it happening -- the valuation is obscenely high," Chhabra said.
He said within the world of storage and backup, few vendors have both the motivation and the money to buy Rubrik. Dell EMC might want Rubrik's robust capabilities to add to its portfolio, but Dell is still digesting its $60-billion-plus purchase of EMC in 2016. Cisco could probably afford to buy Rubrik, but Chhabra saw little strategic alignment between the two companies.
The Information story also mentioned public cloud giants Microsoft and Google as potentional Rubrik suitors. Microsoft chairman John Thompson is on Rubrik's board, and former Cisco chairman John Chambers is a Rubrik investor.
Because of its amount of funding ($553 million), billion-dollar valuation and high growth rate, Rubrik has been considered a prime candidate to go public with an IPO. But the IPO market is soft, possibly prompting private companies to seek buyers instead.
Bertrand said that as markets mature, it often leads to vendor consolidation. In the backup market, many players are moving beyond simple backup and recovery, folding data management, disaster recovery and high availability into their products. Bertrand said this market segment is heading toward intelligent data management and reusing copies of data for analytics, test/dev and other purposes besides just backup.
"I am expecting some consolidation in the [backup] market in the context of its transformation into more intelligent data management and data reuse," Bertrand said.
Rubrik competes with fellow cloud backup relative newcomers Druva, Cohesity and Veeam. In the time period between mid-2018 to early 2019, more than $1 billion was invested in data protection and management vendors by private equity and venture capitalist firms. Rubrik also competes alongside more established traditional backup vendors such as Veritas, Dell EMC and Commvault.
Rubrik acquired Datos IO in February 2018 to expand its data protection to cover NoSQL databases, a capability that few vendors cover. Cohesity bought Imanis Data in May 2019 with similar motivations.