Keen to avoid flop
Darktrace ‘to seek lower valuation in IPO’
The company helps clients identify intruders within their computer systems (pic: Terry Murden)
Cybersecurity company Darktrace is expected to cut the valuation of its forthcoming flotation to avoid a repetition of Deliveroo’s flawed public debut.
The loss-making company is likely to announce to the London Stock Exchange on Monday that it will have a market capitalisation of between £2.4bn and £2.7bn against a recent valuation of about £3.6bn.
The reduced price range will be an attempt to ensure a strong after-market trade in its shares, according to Sky News.
Advisers are warning against repeating Deliveroo’s calamitous initial public offering (IPO) last month when shares in the food courier business fell by more than a quarter on their first day of trading.
Darktrace is also pursuing a more cautious approach because of what one adviser described as “noise” relating to its links to Mike Lynch, the company’s first investor.
Mr Lynch, who backed the cybersecurity company through Invoke Capital, is battling extradition to the US over the sale of software company Autonomy Corporation to Hewlett Packard in 2011.
Even at a £2.4bn-£2.7bn valuation, Darktrace’s IPO will crystallise a multimillion pound stake for Poppy Gustafsson, its 38 year-old chief executive.
The listing will provide another acid test of investors’ appetite to embrace technology company flotations in London.
Founded in Cambridge in 2013, the IPO is likely to involve the sale of about £250m of new and existing shares in the company.
The cybersecurity company, which helps clients identify intruders within their computer systems, will, unlike Deliveroo, not have a dual-class share structure – one of the factors cited in investors’ lacklustre response to Deliveroo.
Darktrace employs 1500 people, and operates from 44 offices, with dual headquarters in Cambridge and San Francisco.
Its blue-chip corporate customers have included AIG, BT Group, Jimmy Choo, the Science Museum Group and William Hill.