What does Darktrace’s listing on the London Stock Exchange mean for the UK tech sector?
Last week, Cambridge-based cyber security firm Darktrace officially launched on the London Stock Exchange. Business Leader delved into what took place during the floatation, and what it means for the wider tech sector.
Following its confirmation of intention to float announcement on 19 April 2021, Darktrace plc announced the successful pricing of its initial public offering (IPO) of Shares at 250 pence per Share on 30 April.
Based on the offer price, the market capitalisation of the company is approximately £1.7bn. 66 million shares are being issued as part of the IPO.
In total, Darktrace raised £143.3m through the listing, with existing shareholders raising £21.7m.
The ‘unicorn’ tech firm made its name through its innovative use of artificial intelligence to detect and counter cyber threats for businesses across the world.
Following the launch, Poppy Gustafsson, Chief Executive of Darktrace, said: “This milestone marks an exciting day for Darktrace. This business is one built by collaboration and as such there are many people I would like to thank.
“Firstly, to our 1,500 dedicated employees: your ambition, dedication, teamwork and commitment to our shared mission of solving complex challenges with innovation is unparalleled. Today is the amalgamation of all of the daily successes that each of you have contributed along the way.
“I would also like to thank our customers who are the true security heroes, embracing cutting-edge technology to keep their organizations safe from attack, as well as our partners for their support. We owe much gratitude to the Invoke team for their pivotal role in the vision, technology, positioning and operational input in the early years without which today’s success would not have been possible.
“We also thank our investors, Talis Capital, Hoxton Ventures, Summit Partners, KKR, TenEleven Ventures, Insight Partners, Vitruvian and Balderton Capital and we are pleased to welcome our new shareholders to the company alongside them.
“Our company is deeply rooted in the UK’s tradition of scientific and mathematic research so we are especially proud to be listing on the London Stock Exchange. To our world-class inventors at our R&D centre in Cambridge, today is really about celebrating you. Not only have you created a fundamental technology that 4,700 organizations now rely on to help them tackle novel and advanced cyber-threats, but you remain committed to innovation, pushing the envelope and shaping the world with your ideas. Today is just the beginning.”
Retail investors weren’t invited to participate in the IPO but they can now buy via the secondary market. Due to ISA and SIPP rules, shares can only be purchased through these accounts when unconditional trading started earlier today.
UK tech has set a strong precedent for others to follow
Russ Shaw CBE, Founder of Tech London Advocates and Global Tech Advocates shared his thoughts on the listing.
Just as the Lord Hill Review voiced London’s aspirations to become a world-leading listings destination, Deliveroo’s underwhelming stock market debut will have done the City no favours in achieving this goal. The spectre of this disappointing flotation will no doubt have been a concern Darktrace, but there are many reasons to be optimistic about today’s IPO given the early jump in share price. This is another significant moment to boost the credentials of the Stock Exchange and position London as a prominent post-Brexit tech hub. With two of the country’s largest tech firms now having committed to London, UK tech has set a strong precedent for others to follow, whether from our pool of domestic scale-ups or from overseas.
In the meantime, Darktrace is primed for continued growth, with a strong background in the intelligence services and academia. Cybersecurity, and particularly cyber software, is a key global growth sector and one that should continue to thrive with the increasingly connected digital economy. Although cybersecurity is increasingly seen as a must-have rather than an ‘insurance’ cost, the market is hugely competitive with solutions evolving as quickly as threats. Darktrace will hope that investors and customers stay loyal.
DarkTrace makes stealthy launch onto the London market
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown also shared her thoughts with Business Leader regarding the cyber security firm’s listing in London.
Cyber security firm, DarkTrace is making a stealthy launch onto the stock market this morning, slinking into publicly listed status to access a new stream of investment. It raised £143.3 million through the initial listing which will be used to further develop its AI technologies which detect and counter cyber threats. As an expert in assessing threats to other firms, it comes as little surprise that the target price was scaled back from expectations, to lower the risk of a disappointing debut following the Deliveroo listing debacle. The valuation reassessment came amid concerns investors might spy a possible reputational issue, following reports of links between DarkTrace and the former Autonomy CEO Mike Lynch. He is fighting a US extradition bid over fraud allegations relating to Autonomy’s sale to HP.
While other recent, high-profile tech launches on the London market like Deliveroo and MoonPig could be described as superficial tech, being e-commerce platforms designed to give existing industries a digital makeover, DarkTrace has complex tech at its core. Founded by US and UK intelligence veterans in 2013, it uses AI and more specifically, machine learning to scan regular business operations and detect tiny irregularities, which can be the canaries in the coalmine of cyber attacks. The global shift to digital which has accelerated during the pandemic, should open up new opportunities and markets for DarkTrace as firms scale up their operations to meet demand, whilst trying to ensure their systems stay secure. A successful launch will be a coup for the London market, and should help attract more fast growing tech companies to list in the UK.