Darktrace targets listing for early May

Cyber-security firm Darktrace on Monday said it planned to list its shares on the London Stock Exchange in early May as part of its expected £3bn flotation.

Darktrace said it was targeting a free float of at least 20% of its issued share capital with up to 15% of shares made available through an over-allotment option and expected to be eligible for inclusion in the FTSE UK indices.

"The final offer price in respect of the offer will be determined following a book-building process, with admission currently expected to occur in early May 2021," the company said in regulatory filing on Monday.

There also is also expected to be a secondary sell-down of existing ordinary shares by certain existing shareholders, it said.

Darktrace, backed by tech entrepreneur Mike Lynch, aims to raise new funds to accelerate product development and strengthen its balance sheet. The Cambridge-based company uses artificial intelligence (AI) to understand computer networks and detect attacks by identifying unusual behaviour.

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.