Darktrace has unveiled plans to float in London in a boost for the City after the disastrous debut of Deliveroo.
Poppy Gustafsson, chief executive of the cybersecurity company, said the announcement marked “a historic day for the UK’s thriving technology sector”.
Darktrace was founded in 2013 by mathematicians from the University of Cambridge and former British and American spies. It provides cybersecurity products to businesses which it says create “a self-learning, self-healing network” that can “protect, detect, defend and heal”. The company is expected to seek a valuation of as much as £3 billion upon debut.
At the end of last year, Darktrace had 4,600 customers in about 100 countries and employed about 1,500 people. Almost all of its revenue comes from subscriptions to its cybersecurity products. Today it estimated the size of its potential market at $40 billion.
Darktrace received seed funding from Invoke Capital, the venture capital firm set up by Mike Lynch, the embattled former chief executive of Autonomy. Invoke remains Darktrace’s largest shareholder with a stake of 39.5 per cent, according to Forbes. Lynch sits on Darktrace’s science and technology committee.
Advertisement
Gustafsson, 38, said today that Darktrace’s success was “testament to the strength of the UK’s world-leading science base and long history of mathematical discovery and computing inventions, from Charles Babbage and Ada Lovelace to Alan Turing. We are proud to be part of that tradition of British innovation, as the UK becomes a leading global centre for the development of AI.”
Darktrace will apply to list its shares on the premium segment of the main market of the London Stock Exchange. Unlike Deliveroo, it will not have a dual-class share structure, which waters down the voting rights of company outsiders. Darktrace said it expects to have a free float of at least 20 per cent of its shares after it lists. All told, this would make the company eligible for inclusion in index-tracking funds.
Darktrace said that it would use the proceeds of the float “to accelerate new product development, drive broader awareness of the company’s products globally and to provide balance sheet strength and financial flexibility”. Existing shareholders will also be able to offload some of their holdings. Gustafsson is believed to own a stake shares worth about £20 million.
For the year to June 30, Darktrace reported a pre-tax loss of $26.9 million on revenue of $199 million. In the same period the year before, the pre-tax loss was $37.5 million on revenue of $137 million.
For the six months to December 31, Darktrace reported a pre-tax loss of $47.9 million on revenue of $114.1 million. In the same period the year before, the pre-tax loss was $22.2 million on revenue of $84.1 million.
Advertisement
About 18 per cent of its billings came from the UK, 21 per cent came from continental Europe, 39 per cent from the United States and Canada and 22 per cent from elsewhere. It said that it expected growth in North America to be the strongest of all regions in the coming years.
Lynch, 55, sat on Darktrace’s board until 2018. He founded the software company Autonomy and sold it to Hewlett Packard for $11 billion nearly a decade ago. The deal went sour and HP is now pursuing Lynch for $5 billion in damages, alleging accounting fraud, which he denies. The entrepreneur is fighting an extradition request from America where he faces 17 criminal charges.
Sushovan Hussain, Autonomy’s former chief financial officer, is also a former Darktrace board member. In 2018 Hussain, 56, was convicted of fraud in the US over the HP deal and jailed for five years.
Darktrace has overhauled its board in the run-up to its expected float. Last month it appointed Gordon Hurst, the former director of Capita, as chairman. Hurst had served as a Darktrace director since July 2019. It also drafted in Lord Willetts, the former science minister, and Sir Peter Bonfield, the former chief executive and chairman of BT.
Shares in Deliveroo, the food delivery group that floated last month, are down by 35.3 per cent from their offer price. Today they traded 0.8 per cent, or 2¼p, lower at 252p.