Darktrace announces intention to float

Darktrace has announced its intention to float on the London Stock Exchange in an offer likely to value the artificial intelligence (AI) cyber-security company at up to £3bn.

The company said it expected to trade on London's main market with a free float of at least 20% after admission with up to 15% of shares made available through an over-allotment option. Darktrace would be eligible to join the FTSE indexes.

Darktrace said the initial public offering would raise money for new products, to increase awareness among potential customers and give it financial strength and flexibility. Existing shareholders would also sell shares to cash in their investments.

Analysts expect the company, founded in 2013 and led by chief executive Poppy Gustaffson, to seek a valuation of £2.5bn to £3bn. The IPO will test investors' appetite for technology companies after Deliveroo's offer flopped though Darktrace is a pure tech company rather than a food delivery business with an app.

The Cambridge-based company's platform uses AI to protect computer systems against cyber attacks. It says its technology stands out because it spans the full range of digital attack points, from email to infrastructure and the internet of things. AI means the technology can self-learn and automatically respond to and investigate suspicious activity.

Revenue increased from $79.4m in 2018 to $199.1m in 2020 and adjusted earnings swung to a $9m profit from a $27m loss, helped by travel restrictions during the Covid-19 crisis. Customer numbers rose to 3,858 from 1,659 over the same period.

Gordon Hurst, Darktrace's chairman, said: "Darktrace is a global pioneer of self-learning AI. As one of Europe's fastest growing technology companies, it has driven impressive growth over the past seven years as it seeks to empower organisations to defend their systems against increasingly complex and aggressive cyber threats.

"Led by a highly experienced management team with deep AI expertise, I believe that Darktrace is uniquely placed to continue to grow, harnessing its innovative technology, leading market position and strong balance sheet to enter new sectors and geographies with its cyber AI platform."