Darktrace IPO: Everything you need to know about Darktrace
Ben Lobel April 12, 2021 10:04 AM
Darktrace emerged as a luminary of artificial intelligence-led cybersecurity in 2013 and progressed to unicorn status by 2018. Find out what you need to know about the company ahead of the Darktrace IPO in 2021.
When is the Darktrace IPO?
Darktrace has announced its intention to list on the London Stock Exchange by the end of April. The offer has the intention of raising funds for further product development and global expansion. The company anticipates that it will have a free float of 20% of issued shares, which would make it eligible for the FTSE indices.
The leadup to the Darktrace IPO has been blighted with negative press, as top investor Mike Lynch, with whom Darktrace senior management has close ties, faces extradition to the US on fraud charges. If convicted, he could potentially be forced to sell his stake – which through his investment fund Invoke Capital sits at around 40% of Darktrace – to pay for fines or legal fees.
UBS, originally hired as lead bookrunner, was also reported to have dropped out, after its compliance department was unable to complete a suspicious activity report on the group.
Nonetheless, the company is expected to successfully ride the wave of anticipation surrounding fast-growth tech stocks, particularly due to the relative rarity of such a prospect coming from Europe. The London listing will be closely watched following the disappointing Deliveroo IPO in March.
Read about more IPOs set for 2021.
How much is Darktrace worth?
The IPO is expected to value Darktrace between £2.5-3 billion according to its filling documents.
As of 2018 Darktrace was valued at $1.65 billion following a $50 million Series E funding round. The company’s Series D round amounted to $75 million in 2017, which valued the company at $825 million. Before that, Darktrace also raised $64 million in 2016, and $23 million in 2015.
How to trade Darktrace shares
You will be able to trade Darktrace shares with City Index as soon as the company has completed its listing and its shares are publicly-traded.
In the meantime, you can start trading shares in just a few quick steps:
- Open a City Index account, or log in if you’re already a customer
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- Place the trade
What is Darktrace?
Darktrace is an artificial intelligence (AI) company with a focus on cybersecurity. It develops solutions for organisations to detect emerging online threats, using technology based on machine learning and AI algorithms to prepare clients for potential attacks.
The company works by installing an appliance in a client’s network infrastructure. The device employs its machine learning capabilities to detect suspicious activity, using Bayesian mathematical equations to assess the probability of an attack, and neutralises threats before they turn into crises.
Darktrace’s products include Darktrace Industrial, Darktrace Enterprise, Darktrace Cloud and Darktrace SaaS, all software applications designed to target threats from various online sources.
Headquartered in Cambridge, the company has more than 1,500 employees across 44 offices globally, and saw revenues of more than £100 million for its latest accounts filed in 2019.
How does Darktrace make money?
Darktrace makes money through cybersecurity contracts with corporations, governments and banks, reportedly charging clients based on the number of IP addresses or networked devices managed.
This can result in a contract being worth anything from a few thousand to several hundred thousand pounds per month.
The company has counted Micron, Rolls-Royce, Coca-Cola, Siemens, and NHS trusts as some of its key customers.
Is Darktrace profitable?
As of its latest 2019 accounts, Darktrace is not a profitable business, having racked up losses of £21.8 million on revenues of some £100 million. However, these losses were trimmed from £27.6 million the prior year.
Founder Poppy Gustafsson said in 2018 that the profitability of the business was being put on hold as the company’s high-growth phase placed hiring and international expansion as an immediate priority.
Who are Darktrace’s competitors?
Darktrace’s competitors include IT multinationals such as Cisco, which offers its own b2b cyber defence solutions, as well as specialist cybersecurity companies such as Fortinet, Palo Alto Networks, FireEye and ESET. Additionally, there are a host of other companies releasing new products in response to the constantly-evolving cybersecurity marketplace.
While Darktrace’s revenues are currently dwarfed by many of the American cybersecurity giants in a hugely competitive sector, the company is widely considered to be a major early adopter and leading innovator specifically of AI-based cybersecurity solutions. Today, however, as more and more companies enter the AI space, Darktrace may find tougher barriers to scale than previously encountered.
What is Darktrace’s strategy?
From its launch in 2013, Darktrace set out to ‘fundamentally transform the ability of organisations to defend their most critical assets in the face of rising cyber threat’. On launch, the company’s technology was widely regarded as pioneering in its design to enable network infrastructures to mirror the human immune system in dealing with threats.
The strategy evolved over the years to incorporate Autonomous Response technology, which allowed the ‘immune system’ to react to in-progress cyberattacks with a higher degree of precision. 2019 saw the release of the Cyber AI Analyst, which further strengthened a company’s ability to defend attacks through automation of the threat investigation and reporting process.
Who are the directors of Darktrace?
Darktrace was founded in 2013 by Poppy Gustafsson, Jack Stockdale, Dave Palmer, Emily Orton, and Nicole Eagan. In addition to the core founders, there are a number of prominent board members and advisors, including Robert Webb QC, former General Counsel of Rolls Royce and British Airways, and Alan Wade, former CIO of the CIA.
Here are some of the key personnel at the company:
- CEO and Director: Poppy Gustafsson
- Chief Financial Officer: Cathy Graham
- Chief Technology Officer: Jack Stockdale
- Chief Technology Officer, Americas: Eloy Avila
- Chief Marketing Officer: Emily Orton
- Chief Information Security Officer: JR Tietsort
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