VC-backed Darktrace lists on LSE

Darktrace first announced its intention to float on 19 April 2021.
The company intended to price its IPO in the 220-280 pence range, according to Unquote sister publication Mergermarket.

Darktrace's shares listed at 250 pence apiece when it began trading at 8am on Friday 30 April. The value of its shares rose by around 40% to 350 pence apiece when they initially began to trade, according to media reports.

Based on its initial pricing, the company has a market capitalisation of around £1.7bn. The company had sought a valuation in the £2.4-2.7bn range, according to media reports.

Jefferies, Berenberg and KKR Capital Markets have been mandated as joint global co-ordinators for the IPO, with Needham and Piper Sandler acting as joint bookrunners.

Q2 has traditionally been a busy period for private-equity- and venture-capital-backed IPOs, although none took place in Q2 2020 amid the early months of the coronavirus crisis, according to Unquote Data. In fact, 2020 saw just two IPOs in H1, with four further flotations in Q4.

There were 11 PE and VC-backed IPOs in Q1 2021, according to Unquote Data, showing the pent-up market demand. These included Germany-based used car sales platform Auto1, which listed in February with a market cap of €7.9bn.

Earlier in April 2021, Sweden-based real estate classifieds platform Hemmet listed in on the Nasdaq Stockholm. Further listings expected for Q2 2021 include Hg's MeinAuto, which has drawn comparisons to Auto1, although the platform focuses on new car sales. Cinven-backed Synlab, Hellman & Friedman-backed banking platform Allfunds and EQT's Suse have also announced plans to list in Q2.

Previous funding
Invoke Capital invested in Darktrace in September 2013. In March 2015, Hoxton Ventures, Invoke and Talis led an $18m round for Darktrace. In July that year, Summit Partners led a $22.5m series-B round for the company.

KKR led a $65m round for Darktrace in July 2016, joined by new investors TenEleven Ventures and SoftBank. Darktrace's existing investors also took part in the round.

Insight Venture Partners led a $75m series-D funding round for Darktrace in July 2017. Existing investors Summit Partners, KKR and TenEleven also backed the round.

In September 2018, Vitruvian Partners led a $50m series-E funding round for the company. Existing investors including KKR and TenEleven also backed the round.

Balderton Capital invested in Darktrace in December 2018 via a secondary share sale, according to a report from the Financial Times published on 10 May 2019.

Company
Founded in 2013, Darktrace is a cybersecurity software developer. Its AI-based software is used to detect, investigate and respond to security threats. Its clients have included eBay, McLaren Group, and the city of Las Vegas, according to the case studies listed on its website.

The company is based in Cambridge and San Francisco, and posted revenues of £106.8m alongside an operating loss of £22m in 2019, compared with revenues of £59.7m and an operating loss of £26.2m in 2018. It posted revenues of £146m in the financial year to June 2020. Darktrace had six employees at the time of its first funding round in 2013 and now has 1,500 staff.

People
Darktrace – Poppy Gustafsson (CEO).
Talis Capital – Vasile Foca (co-founder, managing partner).
Summit Partners – Han Sikkens (managing director).
Vitruvian Partners – Sophie Bower-Straziota (partner).
TenEleven Ventures – Alex Doll (founder).
KKR – Stephen Shanley (managing director).

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