Darktrace, the cybersecurity company founded in Cambridge in 2013, is expected to announce its intention to float next week, it has emerged.
The company is finalising plans for a £3bn ($4.2bn) stock market listing just days after Deliveroo’s (ROO.L) dire London debut.
City sources told Sky News that Darktrace’s board, led by new chairman Gordon Hurst, was confident that its shares would begin conditional trading around the end of this month.
The company uses artificial intelligence (AI) technology to spot cyber threats for businesses. Some of its clients include BT Group (BT-A.L), William Hill (WMH.L) and online shopping giant Ocado (OCDO.L)
The Darktrace listing is set to be one of the most prominent to emerge from the UK’s cluster of tech unicorns - companies with a valuation of at least $1bn.
However, people close to the initial public offering (IPO) said its advisers were expected to urge a more conservative approach to pricing in the wake of Deliveroo’s poor arrival on the public markets, Sky News said.
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Last week, the loss-making food delivery company, which is backed by Amazon (AMZN), suffered one of the worst debuts on record, with shares falling 30% in the first half hour of trading, wiping more than £2bn ($2.7bn) off the company’s value.
Tens of thousands of retail investors who invested in the firm through a platform called PrimaryBid are now facing heavy paper losses on the back of the fall. Around 70,000 individuals put £50m into the company.
Wednesday marked the start of conditional dealing for Deliveroo shares, which means only institutional investors can buy and sell the stock. Retail investors must wait until the start of unconditional dealing next Wednesday to make any adjustments.
The IPO flop is bad news for Amazon, which is the biggest institutional investor in the business. Amazon owns just over a 10% of the business. Other prominent investors include T Rowe Price (TROW), Fidelity, and venture capital funds Index and Accel.
It is now likely that Darktrace will seek a lower valuation than the $5bn mooted in recent months. In November last year it was reported that it was in talks with investment lenders, including UBS and Berenberg, to work on the float.
The IPO is also likely to include the sale of around £250m new and existing shares in the company.
Cambridge-headquartered Darktrace also has a base in San Francisco in the US, with more than 44 offices across the globe. It employs over 1,200 workers.
Last year, Wall Street bank Goldman Sachs (GS) reportedly declined a role in the blockbuster IPO of Darktrace due to legal issues surrounding its biggest shareholder Invoke Capital, which was founded by Mike Lynch.
Goldman raised concerns about the billionaire tech entrepreneur’s ongoing extradition battle over the $11bn sale of software company Autonomy to Hewlett Packard in 2011.
Lynch faces a hearing at the beginning of 2021 after US authorities charged him with 17 counts or securities and wire fraud. He submitted himself for arrest in February this year and was given bail in return for £10m security.
In 2018, Lynch stepped down from the Darktrace board. He denies the charges against him.
Some firms have also questioned whether underwriting the stock market float could constitute a potential breach of Britain's Proceeds of Crime Act.
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