Deliveroo IPO Failure Raising Alarm Bells
Darktrace specializes in artificial intelligence (AI) technology which it uses to identify and protect from cyber attacks in companies’ IT systems. The cybersecurity startup claims its self-learning AI technology tracks the threats in real-time and responds to them by itself.
The startup company was founded in 2013 by a group of former intelligence specialists and mathematicians. The cybersecurity business said it plans to float a minimum of 20% of issued share capital via its London IPO. By doing this, the cybersecurity startup business would become eligible to be included in major indices such as the FTSE 100.
“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 U.K.’s thriving technology sector,” said Poppy Gustafsson, chief executive and co-founder of the cybersecurity business.
“We are proud to be part of that tradition of British innovation, as the U.K. becomes a leading global centre for the development of AI.”
Darktrace’s move is coming amid concerns over the disappointing Deliveroo’s IPO in London when the company’s shares plummeted 30% on the first day. This marks one of the weakest-performing IPOs in London for a major company.
Following the Deliveroo failure, London said it is considering easing IPO requirements in an effort to lure more high-growth tech companies. Deliveroo has been dogged by employment rights issues, which may have led to a disappointing IPO. The company said it’s “just starting life as a public company” and feels confident about its capabilities to deliver long-term business returns for shareholders.
Darktrace’s business revenue for the year through June 30, 2020, was $199.1 million, up 45% compared to the same period a year earlier. The startup company reported a loss of $28.7 million, down from the $34.7 million it reported in the 2019 fiscal year.
Its biggest business backer is Mike Lynch’s venture fund Invoke Capital. Lynch is currently facing potential extradition to the United States over fraud allegations linked to the sale of the software company he founded, Autonomy, to Hewlett-Packard (HP) in 2011 for $11 billion.
After its last funding round, Darktrace hit a business valuation of $1.65 billion. The startup company plans to hire Jefferies, Berenberg, KKR Capital Markets as its lead underwriters for the IPO, with Needham and Piper Sandler acting as joint bookrunners.
A few days ago, the cybersecurity business communicated results of joint research it conducted with MIT Technology Review, which found that 96% of security leaders are bracing for the emergence of AI cyberattacks, with the majority of those companies shifting to AI defenses.
The top three most concerning threats being email attacks (74%), ransomware (73%), and cloud-based attacks (68%). As many as 68% of the respondents said they believe AI will be used for impersonation and spear-phishing attacks.
The UK cybersecurity startup business Darktrace said it is planning to go public in London despite Deliveroo’s recent discouraging public debut.
About the Author
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.