Vickers-backed Hillstone Networks raises $133m in Shanghai STAR IPO

A sign for STAR Market, China's new Nasdaq-style tech board, is seen before the listing ceremony of the first batch of companies at Shanghai Stock Exchange. Photo: Reuters

Silicon Valley-based Hillstone Networks, an enterprise network security solutions backed by Singapore venture capital firm Vickers Venture Partners, has raised 949 million yuan ($133 million) in its initial public offering (IPO) in Shanghai.

The company’s stock listed on the Shanghai Stock Exchange’s sci-tech innovation board (STAR Market) and rose by 112 per cent after the first day of trading, with a market cap of 8.1 billion yuan ($1.1 billion) according to a statement.

Vickers Venture Partners, which invested in Hillstone Networks in 2009, has partially exited from the firm saying listing on STAR is a “major milestone” for its portfolio company.

“Back in 2009 when we were looking at opportunities to invest in the field, Hillstone stood out as a startup with the best technology and most experienced team,” said Vickers Venture Partners’ Managing Director Linda Li. “Listing on STAR is a major milestone for Hillstone as it recognizes the quality of its solutions, in addition to cementing its market-leading position.”

Vickers is based in Singapore with offices in Kuala Lumpur, Shanghai, Hong Kong, New York, San Diego, Silicon Valley, and London.

Founded in 2006, Hillstone Networks provides enterprise network security solutions to over 17,000 customers worldwide, including Fortune 500 enterprises, financial and educational institutions, as well as government and service providers.

Hillstone’s IPO in Shanghai is timely as network security plays a critical role in China, especially in cloud computing, 5G development, and IoT.

In July, China released an industry blueprint that shows the government is ramping up efforts to develop its domestic cybersecurity industry, with plans to build a cybersecurity industrial part in Beijing that will generate $14.8 billion by 2020.

Currently, the US is the global industry leader as North America captured the majority share of the cybersecurity market in 2017, followed by Europe. It is anticipated that the Asia Pacific will occupy over 30 per cent of the global cybersecurity market by 2025, according to business data platform researchandmarkets.com.

The global cybersecurity market is projected to exceed $177 billion by 2025.

“Whether clients require physical, virtual or cloud solutions, Hillstone provides continuous threat defense at traditional perimeters and internal networks – right down to each virtual machine,” the company said.

China launched the NASDAQ-style Star market in the middle of this year, a new trading venue that is the only one currently allowing companies with dual-class share structure to go public.