Cybersecurity firm Darktrace plans £3bn IPO on London Stock Exchange

The cybersecurity firm Darktrace has announced plans to float on the London Stock Exchange, in a move that will reportedly value the Cambridge-based company at £3bn.

It is the first big company to have chosen the City for its initial public offering (IPO) since Deliveroo’s disappointing stock market debut last month.

Darktrace, founded in Cambridge in 2013, employs more than 1,500 staff globally and is backed by the tech entrepreneur Mike Lynch. It claims to have been the first to use artificial intelligence to detect and tackle cybersecurity threats on a large scale.

The firm, which has 4,600 customers including Rolls-Royce and memory chip producer Micron, said demand for some of its products surged last year as companies scrambled to keep up with security risks following the boom in homeworking during the Covid outbreak. Darktrace started offering its services to the NHS, free of charge, at the start of the pandemic.

The IPO will value Darktrace, co-headquartered in Cambridge and San Francisco, at about £3bn, making its chief executive Poppy Gustafsson’s stake worth about £20m, according to Sky News.

The company plans to float at least 20% of its shares, with an option to release a further 15% of shares to the market. The money raised will help speed up product development and strengthen the balance sheet, Darktrace said.

“Our intention to list on the London Stock Exchange marks a major milestone in Darktrace’s history of rapid growth, and a historic day for the UK’s thriving technology sector,” Gustafsson said.

There were reports in February that the Swiss banking firm UBS had pulled out of plans to sponsor the float owing to the company’s links to the multimillionaire investor Lynch.

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Lynch’s investment vehicle Invoke Capital was one of Darktrace’s first financial backers and reportedly owns a 40% stake that could be worth £1.2bn. He is fighting extradition to the US where he is accused of fraudulently inflating the value of Autonomy before its £8.4bn sale to Hewlett-Packard in 2011. Lynch, who could face a maximum prison sentence of 25 years if found guilty, denies any wrongdoing.

Created by a team of cybersecurity experts and mathematicians, Darktrace says it is tapping a market worth about $40bn (£29bn), and its revenues have grown from $79m in 2018 to $199m in 2020.

Adjusted earnings swung from a $27m loss to a $9m profit over the same period, helped by a sharp decline in travel costs due to restrictions imposed during the Covid pandemic.


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