British cyber security firm Darktrace confirms intention to float on London Stock Exchange

April 12, 2021

British cyber security firm Darktrace has said it intends to float on the London Stock Exchange.

The news confirms a report by Sky's City editor Mark Kleinman over the weekend.

Darktrace, founded in 2013, said it expected to raise funds to speed up product development, drive awareness of its products, and provide balance sheet strength and financial flexibility.

There will also be a secondary sell-down of existing ordinary shares by some existing shareholders.

Darktrace's float is likely to value the company at between £2.5bn and £3bn, Sky News has reported, with chief executive Poppy Gustafsson's shareholding likely to be valued in the region of £20m.

The filing of its registration documents will mean that Darktrace's shares will begin conditional trading at around the end of this month.

The firm uses AI to understand IT networks and detect attacks, and its clients include Rolls-Royce and Coca-Cola.

Ms Gustafsson told Reuters news agency: "We are in a new era of attacks...it's going to be these little pieces of code fighting it out in the background of our businesses."

She said the company's technology interrupts a threat every second.

Darktrace has had a rocky journey towards a public listing, with UBS resigning as one of the sponsors of its IPO amid concerns about the role of Mike Lynch, the billionaire founder of software company Autonomy, who is battling extradition to the US.

Mr Lynch was the first shareholder in Darktrace through his investment vehicle, Invoke Capital.

People close to the situation attributed UBS's decision, however, to anxiety within the Swiss bank over a Dutch court's decision that Ralph Hamers, its new chief executive, should face investigation into a money-laundering scandal at ING, his former employer.

Darktrace has in recent weeks appointed a number of political and industry veterans to its board, including Lord Willetts, the former science minister, and Sir Peter Bonfield, the former BT Group boss.

Its new chairman, Gordon Hurst, also chairs Featurespace, another Invoke-backed company.

Darktrace's revenue increased from $79.4m (£57.7m) to $199.1m (£144.8m) between its 2018 and 2020 fiscal years, but it has reported losses on the operating and pre-tax levels.

Ms Gustafsson said: "Our focus is on growth.

"But due to our operating leverage, we've got a fantastic high gross margin and the fundamental foundations of the business are demonstrably sustainable."

Darktrace employs 1,500 people, and operates from 44 offices, with dual headquarters in Cambridge and San Francisco.

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