Cyber security group Darktrace plans to float in London

Cyber security company Darktrace plans to float in London in a vote of confidence for the exchange weeks after the listing of fellow start-up Deliveroo hit problems on its first day of trading.

Darktrace, which was founded in 2013, said on Monday that it planned an initial public offering on the London Stock Exchange’s main market in what chief executive Poppy Gustafsson said would be “a historic day for the UK’s thriving technology sector”.

The company uses artificial intelligence to detect and respond to cyber threats. It generated revenue of almost $200m in its latest financial year but estimates that it is going after a market worth $40bn a year. It is also profitable on earnings before interest, tax, depreciation and amortisation, with ebitda of $9m in its latest financial year.

“Developed by our talented software engineering teams in Cambridge, our artificial intelligence was the first on the market to be deployed at scale in the enterprise,” said Gustafsson. “Today [it] is responsible for protecting over 4,700 organisations worldwide from the most sophisticated cyber threats.”

There have been fears for the future of tech IPOs in London after shares in Deliveroo, the food delivery company, fell by almost a third on their first day of trading at the end of last month. After falling by another 10 per cent on Friday, Deliveroo shares were trading up by almost 3 per cent on Monday morning.

While it has chosen to list in London, North America is Darktrace’s largest market and, according to Monday’s filing, its greatest source of growth.

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Darktrace’s revenue grew at 39 per cent during the six months ending in December, the first half of its financial year, to $126.5m, compared to 45 per cent growth in the last full year. But pre-tax losses more than doubled to $47.9m in the first half the current fiscal year, primarily due to a jump in financing costs. Operating losses narrowed from $21.5m to $4.9m in the same period.

Jefferies, Berenberg and KKR Capital Markets are joint global co-ordinators for the float while Needham and Piper Sandler will act as additional joint bookrunners.


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