Shares of Cybersecurity Startup Darktrace Soar 40% on London IPO Debut

By Avi Ben Ezra Friday, April 30, 2021

Shares of the cybersecurity startup company Darktrace soared 40% on the first day of its initial public offering (IPO) in London.

An upward trending graph.

Despite Criticism, Darktrace Impresses on Its IPO Debut

Darktrace stock soared to £3.60 ($5) per share today before pulling back to trade below £3.50 ($4.85) per share. Earlier, the UK-based cybersecurity company priced its stock at £2.50 ($3.46) per share to hit a business valuation of £1.7 billion ($2.36 billion).

The company’s stock debuted in conditional dealings under the “DARK” ticker on the London Stock Exchange today. Darktrace said it has 9.9 million more available shares to sell if needed.

The IPO was based on selling roughly 66 million shares, translating to 9.6% of the issued share capital by the startup company. The cybersecurity business managed to raise £165.1 million ($228.75 million), out of which £143.4 million ($198.7 million) will go to the company, while its shareholders will receive the remaining £21.7 million ($30 million).

Hussein Kanji, a partner at Hoxton Ventures, one of Darktrace’s first backers, believes the company is still at the start of its journey.

“The IPO is just part of the journey and maturation process for the company. Cybersecurity isn’t going away anytime soon and these kinds of systems that Darktrace offers are going to be increasingly needed, particularly on the autonomous response side,” he said.

The IPO of the cybersecurity business represents a total opposite of the IPO conducted by food delivery company Deliveroo last month when shares of the Amazon-backed startup company plummeted 30% in one of the worst IPOs in London history.

After Brexit, the UK government decided to bring certain changes to its listings regime in a bid to attract more similar companies. The government-commissioned review requested an easing of rules when it comes to dual-class share structures and SPAC deals.

Many business investors have voiced concerns, after Deliveroo’s flop, that it could put off other tech companies from debuting in London. While Darktrace initially hoped to hit $4 billion in business valuation, the cybersecurity startup decided to price its offering on the more conservative part of the price range.

Today’s impressive performance comes in the light of IPO concerns over the startup’s close relationship with the UK tech entrepreneur Mike Lynch, who is facing extradition to the US. These worries prompted investment banking giant UBS to quit the IPO.

Lynch has been accused of allegedly hiking the business value of the software company he founded, Autonomy, which he then sold to hardware giant HP for nearly $11 billion in 2011. Lynch denied the allegations while Darktrace claims Lynch was not directly involved in the company’s day-to-day operations.

Darktrace was founded in 2013 by a group of mathematicians and intelligence experts. The startup utilizes AI technology to identify and fight cyber-related threats. The startup secured $230.5 million in total funding from private investors before its IPO.

Summary

The cybersecurity startup company Darktrace saw its shares surge by 43% on its first trading day in London, bringing the company’s business valuation to $2.36 billion.

About the Author


Headshot for author Avi Ben Ezra

Avi Ben Ezra is the Chief Technology Officer (CTO) and Cofounder of SnatchBot and SnatchApp (Snatch Group Limited). He leads the Group’s long-term technology vision and is responsible for running all facets of the tech business which includes being the architect of the platforms and UI interfaces.

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