Darktrace reveals plan to float in London at the end of the month

The IPO is likely to value the cyber security firm at £2.5-3 billion

Cambridge-based cybersecurity firm Darktrace issued on Monday an "intention to float" announcement, revealing that CEO Polly Gustafsson was planning an initial public offering (IPO) on the main markets of the London Stock Exchange at the end of the month.

The company said that it plans to float at least 20 per cent of its shares, with an option to release a further 15 per cent of shares to the market.

The firm expects the money raised from the IPO to help strengthen its balance sheet and speed up product development.

The IPO will likely value the firm at £2.5-3 billion, according to the Sky News, which first reported about Darktrace's plan.

The new site said that CEO Gustafsson's shareholding was likely to be valued in the region of £20 million, and added that Jefferies Fincancial Group was leading the flotation.

Darktrace was valued at £1.16 billion in its last publicly-announced fundraising in 2018.

"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.

"Our proven track record puts us in a strong position to build on our momentum, continue to innovate, and expand our customer base internationally," she added.

Darktrace's float is likely to involve the sale of about £250m of new and existing shares in the company, according to Sky News.

Founded in Cambridge in 2013, Darktrace states that it is "a pioneer of autonomous response technology," which helps clients neutralise cyber threats across diverse digital estates, including the cloud and networks, Internet of Things (IoT) and industrial control systems.

The firm is headquartered in Cambridge and serves over 4,700 customers in over 100 countries.

The company generated about £145 million in the year ending June 2020 and estimates that it is chasing a market worth £29 billion annually.

"With deep expertise in mathematics and machine learning, as well as operational experience defending critical organisational assets, Darktrace seeks to empower enterprises to defend their systems against the most silent and sophisticated cyber threats," the company states on its website.

Darktrace has had a rocky journey towards its planned IPO. In February, it emerged that UBS had pulled out of backing Darktrace's IPO amid concerns about the role of billionaire tech entrepreneur Mike Lynch.

Lynch was the first shareholder in Darktrace, and owns about 40 per cent of the cyber security firm. He stepped down from Darktrace's board in 2018, and faces charges of conspiracy, securities fraud and wire fraud related to the sale of his company Autonomy to Hewlett Packard in $11.1 billion (about £8.06 billion) deal in 2011. He is currently fighting extradition to the US.

Darktrace's expected move to float in London comes within days after Deliveroo's disastrous IPO late last month. Deliveroo had a value of around £7.6 billion in its IPO but saw its shares fall 35 per cent since it went public.

The firm, which has been hit by investor concerns about its dual-class share structure and gig-economy business model, now has a market cap of £4.66 billion.