Darktrace surges 43% in London IPO debut; valuing the cybersecurity tech startup at $2.4 billion

Darktrace, a Cambridge, England-based cybersecurity startup advised by former MI5 and CIA spymasters, jumped by more than 40% in its London IPO debut on Friday as investors looked past last month Deliveroo’s lackluster listing.

Darktrace was originally priced at 250 pence in the initial public offering Friday morning, valuing the company at £1.7 billion ($2.4 billion). But its shares popped to 352 pence when trading started, well above the 220-280 pence range set by its bankers when its roadshow began on Monday.

Darktrace was founded in 2013 by Poppy Gustafsson, Dave Palmer, Emily Orton, Jack Stockdale, and Nicole Eagan. Darktrace is an AI startup that uses cybersecurity solutions to identify, prevent, and eliminate insider threats.

The founders were leading a team of a world-class team of mathematicians from the University of Cambridge and AI experts, who were working on some ground-breaking applications of AI, experimenting with giving machines a sense of self.

Darktrace’s advisory board includes a former director-general of the British security service, Jonathan Evans, an ex-CIA chief information officer, Alan Wade, and former UK interior minister Amber Rudd.

“Today is just the beginning,” Chief Executive Poppy Gustafsson said.

Still not profitable, Darktrace said it’s presently focused on growth rather than profits. Darktrace is backed by entrepreneur Michael Lynch, who was on its board until 2018 and is still an adviser. He and his wife own stakes worth a total of 440 million pounds after the debut.

However, according to a report from Reuters, Lynch is fighting a U.S. extradition request to face fraud charges related to the sale of Autonomy, a software company he founded and led, to American tech firm Hewlett-Packard. Lynch is also waiting for the verdict of a multi-billion dollar civil claim by HP at London’s High Court, Reuters wrote.

Darktrace detailed the risks related to Lynch in its registration documents, including potential liability in relation to allegations of money laundering made by U.S. prosecutors, although the company said the risk of the latter was low. Lynch denies all the allegations in the cases. He declined to comment on Darktrace.

Darktrace’s self-learning AI is modeled on the human immune system and used by over 3,500 organizations to protect against threats to the cloud, email, IoT, networks and industrial systems. This includes insider threat, industrial espionage, IoT compromises, zero-day malware, data loss, supply chain risk, and long-term infrastructure vulnerabilities. “Every 3 seconds, Darktrace AI fights back against a cyber threat, preventing it from causing damage,” the company said.

Darktrace had raised a total of $230.5 million from investors prior to its IPO, according to Crunchbase. Darktrace currently has over 1,200 employees, 44 offices, and headquarters in San Francisco and Cambridge, UK.