IronNet, a cybersecurity company based in the Washington, D.C. area, is facing a severe financial crisis that has led to the furlough of nearly all its employees and a significant reduction in its business operations.
This decision comes less than two months after a deal with C5 Capital to privatize the company. IronNet’s financial woes stem from its inability to meet debt and obligation commitments, which may result in a default event under its borrowing terms. The company’s stock, which was once valued at $1.2 billion in 2021, has now plummeted to just $0.07 per share.
C5 Capital, the primary funder of IronNet since January, has offered to fund the company’s restructuring efforts, expressing its commitment to supporting IronNet during this challenging period.
IronNet has faced a series of issues, including allegations of default and demands for payment from private equity firm 3i, along with significant board resignations. The company had previously undertaken substantial workforce reductions to achieve cost savings, but its revenue declined, and liquidity problems affected its base of recurring software customers.
IronNet, which derives most of its revenue from a very small number of organizations, saw its top eight customers account for 61% of sales in the most recent fiscal year. The company’s two largest customers accounted for 22% of revenue and 56% of the company’s accounts receivable balance as of Jan. 31.
Despite efforts to cut costs and reduce its net loss, IronNet’s financial situation has deteriorated significantly, raising concerns about its future in the cybersecurity industry.
This development marks the second publicly traded cybersecurity company to cease operations this year, following Cyren’s shutdown in February.