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Darktrace shares soar 43% in London IPO as investors shrug off Deliveroo flop

CNBC logo CNBC 4/30/2021 Ryan Browne
  • Darktrace priced its shares at 250p Friday morning, valuing the cybersecurity firm at £1.7 billion ($2.4 billion).
  • At about 8:15 a.m. London time, Darktrace shares climbed to more than 358p, up 43% from its IPO price.
  • It's the second major test of London's appetite for high-growth tech companies after Deliveroo's IPO flop.
graphical user interface, application: The Darktrace logo displayed on a smartphone with stock market percentages in the background. © Provided by CNBC The Darktrace logo displayed on a smartphone with stock market percentages in the background.

LONDON — British cybersecurity start-up Darktrace saw its shares surge as much as 43% in its London debut Friday, as investors looked past Deliveroo's lackluster listing.

Darktrace priced its shares at 250p Friday morning, valuing the company at £1.7 billion ($2.4 billion).

Darktrace shares started trading in conditional dealings under the ticker "DARK" Friday morning. At about 8:15 a.m. London time, Darktrace shares climbed 43% to more than 358p.

The stock was last up 41% at a price of 352p.

Darktrace said its offering would comprise around 66 million shares — or about 9.6% of Darktrace's issued share capital — and raise a total of £165.1 million. Of that, £143.4 million will go to the company, while £21.7 million will go to existing shareholders. The company has said a further 9.9 million shares will be sold if demand proves higher than expected.

Hussein Kanji, a partner at early Darktrace backer, Hoxton Ventures, told CNBC he believe the company was still in the "early days" of its journey.

"The IPO is just part of the journey and maturation process for the company," Kanji said. "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."

Deliver-who?

It's the second major test of London's appetite for high-growth tech companies. Last month, Amazon-backed food delivery firm Deliveroo flopped in its debut, plunging as much as 30% in one of the worst London IPOs in history.

Post-Brexit Britain is reforming its listings regime to lure firms like these, with a government-commissioned review calling for a relaxing of rules around dual class share structures and special purpose acquisition companies, or SPACs.

London has had a busy year of tech IPOs so far, with the likes of Deliveroo, Trustpilot and Moonpig having gone public. Some investors had feared the disappointing performance of Deliveroo — down over 32% from its IPO price — could put other tech firms off from listing in the city.

At a £1.7 billion market cap, Darktrace was pricing its IPO on the conservative end, compared to the valuation of up to $4 billion it had initially hoped to reach.

The company's listing has been dogged by concerns over its close ties to controversial U.K. tech entrepreneur Mike Lynch, who is battling extradition to the U.S.

Lynch is accused of fraudulently inflating the value of Autonomy, the software company he founded, to Hewlett Packard for almost $11 billion in 2011. Lynch denies any wrongdoing.

Lynch's Invoke Capital was an early investor in Darktrace. Darktrace's CEO Poppy Gustafsson and Chief Strategy Officer Nicole Eagan also both used to work at Autonomy. For its part, Darktrace says that Lynch has no direct involvement with the day-to-day running of the company.

Founded in 2013 in Cambridge by a group of former intelligence experts and mathematicians, Darktrace uses artificial intelligence to detect and respond to cyberthreats in a business' IT systems. It raised a total of $230.5 million from investors prior to its IPO, according to Crunchbase.

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