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Darktrace

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Darktrace Ltd
Company typePrivate
LSE: DARK
Founded2013; 11 years ago (2013)[1]
HeadquartersCambridge, England
Key people
Gordon Hurst (Chairman)
Jill Popelka (CEO)[2]
ServicesCybersecurity
RevenueIncrease US$545.4 million (2023)[3]
Increase US$36.5 million (2023)[3]
Increase US$59.0 million (2023)[3]
Total assetsIncrease US$751.9 million (2023)[3]
Total equityDecrease US$263.5 million (2023)[3]
OwnerThoma Bravo (2024–)
Number of employees
2,269 (2023)[3]
Websitedarktrace.com

Darktrace Ltd. is a British[4] cyber security company, established in 2013 and headquartered in Cambridge, England.[4] It was listed on the London Stock Exchange until it was acquired by Thoma Bravo in October 2024.

History

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Origins

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Darktrace was founded in 2013 in Cambridge, where the Darktrace AI Research Centre is based, with the company's second R&D centre located in The Hague, Netherlands.[5] It was founded by mathematicians and cyber defence experts at Invoke Capital, a company owned by Mike Lynch.[6][7] Lynch was co-founder of Autonomy, sold to Hewlett-Packard in 2011 in a transaction leading to accusations of fraud and to a legal fight over extraditing him to the United States.[8] In 2024 Lynch and Autonomy's former finance executive, Stephen Chamberlain were cleared of all fraud charges.[9]

Many of Darktrace's management personnel, including former chief executive Poppy Gustafsson, chief technology officer Jack Stockdale, and chief strategy and artificial intelligence officer Nicole Eagan, were recruited from Autonomy.[6]

Listing

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In April 2021, Darktrace listed on the London Stock Exchange with a market value of circa £2.5 billion.[10][11] The market value reached a peak of £7 billion within months, with a share value peak of £10, but later fluctuated. On 6 March 2022, Darktrace opened with a share value of £6.46, with a market cap of £3.43 billion.[12]

In March 2022, Darktrace acquired Cybersprint, a Dutch attack surface management company, for €47.5 million.[13]

Poppy Gustafsson stepped down as chief executive officer (CEO) in September 2024. She is succeeded by former chief operating officer (COO) Jill Popelka, who has also been appointed to the Darktrace Board of Directors.[14]

Short seller report

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On 31 January 2023, Quintessential Capital Management [d], a New York-based hedge fund and short seller, published a detailed report alleging potential accounting errors at Darktrace, making claims about potential irregularities in contracts with resellers and customers, predominantly dating from before Darktrace's public listing in 2021.[15] Darktrace has disputed this.[16] Quintessential pointed towards connections between Darktrace and HP Autonomy, the UK software company with which Darktrace shares many ties. Autonomy was accused of irregular accounting practices relating to its $11.7bn sale to Hewlett-Packard in 2011.[17]

The company's share price fell 12 per cent when Quintessential first disclosed its short position on 30 January 2023. The shares then fell a further 8 per cent the following day, after the report was published, down to 200p.[18]

On 18 July 2023, EY concluded its review into the company's contracts and internal financial processes. EY found a “small number of errors and inconsistencies” with some of the contracts but nothing that would be “material” to Darktrace's financial statements.[19]

Takeover

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In April 2024, the private equity business, Thoma Bravo, offered to acquire the company for $5.3 billion.[20] The takeover was approved by the UK Court in September 2024, so allowing the transaction to complete.[21] On 1 October 2024, it was announced that Thoma Bravo had formally completed its acquisition of the firm.[22]

Products

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Darktrace's product uses unsupervised machine learning techniques to build an intrinsic "pattern of life" for every network, device, and user within an organisation. From this evolving understanding of 'normal', it can then detect potential threats as they emerge in real time.[23] It employs an autonomous response technology, Antigena, to take action against in-progress cyber-attacks.[24][25] The product also visualises network activity on a user interface, called the 'Threat Visualiser'.[26]

Darktrace has claimed that it has the capability to defend against zero-day attacks, for example during the log4j vulnerability exploits.[27]

In the wake of the pandemic, Darktrace reported rising demand for its technology as sophisticated cyber attacks surged. Speaking in 2021, Nicole Eagan, chief strategy officer, said:

"At Darktrace, we have a track record of innovation and providing our customers with the technology they need to keep up with the most complex attacks. We have seen an increased need for autonomous cyber defence as companies have transitioned to work from home and adopted more cloud-based tools."[28]

Sponsorship

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Darktrace signed a partnership deal with McLaren Racing in 2020.[29] In 2021, the deal was extended to include McLaren's IndyCar team.[30]

References

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  1. ^ "Darktrace Limited". Companies House. Retrieved 21 March 2021.
  2. ^ Sandle, Paul (6 September 2024). "Darktrace CEO Poppy Gustafsson steps down". Reuters.
  3. ^ a b c d e f "Annual Report 2023" (PDF). Darktrace. Retrieved 12 February 2024.
  4. ^ a b "Company Overview". www.darktrace.com. Retrieved 14 March 2022.
  5. ^ "Company Overview". Retrieved 8 May 2023.
  6. ^ a b "After Autonomy". The Economist. 21 September 2013. ISSN 0013-0613. Retrieved 28 September 2021.
  7. ^ "Darktrace, The Cyber Security Startup Backed By Mike Lynch, Raises Further $18M". TechCrunch. 18 March 2015. Retrieved 28 September 2021.
  8. ^ "Ex-Autonomy boss Mike Lynch charged with fraud in the US". BBC News. 30 November 2018.
  9. ^ "Mike Lynch: Autonomy co-founder cleared of fraud in US trial". BBC News. 6 June 2024. Retrieved 15 October 2024.
  10. ^ Bradshaw, Tim (30 April 2021). "Darktrace shares jump 32% in IPO". The Financial Times. Retrieved 7 June 2021.
  11. ^ "Darktrace: What we learned from building a £2.5bn UK success story". City A.M. 3 June 2021. Retrieved 7 June 2021.
  12. ^ "Darktrace PLC (DRKTF) Stock Price & News - Google Finance". www.google.com. Retrieved 9 March 2022.
  13. ^ Osborne, Charlie (24 February 2022). "Darktrace acquires attack surface analytics firm Cybersprint". ZDNet.
  14. ^ "Darktrace promotes Popelka as CEO Gustafsson steps down". Morning Star. 6 September 2024. Retrieved 15 October 2024.
  15. ^ Patel, Anviksha (31 January 2023). "Darktrace stock falls after New York short seller takes stake". MarketWatch. Retrieved 31 January 2023.
  16. ^ Maatouk, Michele (31 January 2023). "Darktrace hits back after short seller takes stake". Sharecast. Retrieved 31 January 2023.
  17. ^ "Darktrace down 5% as New York hedge fund launches fresh bear raid". Shares Magazine. 31 January 2023. Retrieved 31 January 2023.
  18. ^ "Darktrace shares dive after short seller attack". Financial Times. 31 January 2023. Retrieved 31 January 2023.
  19. ^ "Darktrace shares pop 26% after EY concludes report into accounting allegations". CNBC. 18 July 2023. Retrieved 18 July 2023.
  20. ^ "Thoma Bravo to buy UK's Darktrace for around $5.3 bln". Reuters. 26 April 2024. Retrieved 26 April 2024.
  21. ^ "UK Court Clears Thoma Bravo's Takeover of Darktrace plc". CBonds. 24 September 2024. Retrieved 1 October 2024.
  22. ^ Hogg, Ryan (1 October 2024). "Thoma Bravo closes $5.3 billion Darktrace acquisition weeks after founding investor Mike Lynch's death". Fortune. Retrieved 3 October 2024.
  23. ^ Greene, Tim (9 March 2017). “Darktrace finds more attacks, cuts response time, saves money for Blackhawk Network.” Network World. Retrieved 13 June 2017.
  24. ^ Kobie, Nicole (4 April 2017). “Darktrace's AI is now automatically responding to hacks – and stopping them.” Wired. Retrieved June 13, 2017.
  25. ^ "Losses widen at security start-up Darktrace as it embarks on hiring spree". The Telegraph. 2 April 2018. Retrieved 2 April 2018.
  26. ^ Hamblen, Matt. (5 Dec 2016). “Behavior analytics tools for cybersecurity move into enterprises.” Computerworld. Retrieved June 13, 2017.
  27. ^ "Darktrace AI Stops Cyberattack Exploiting Log4j Vulnerability at Global Financial Services Provider". Dark Reading. 22 March 2022. Retrieved 4 August 2022.
  28. ^ "Rising demand for Darktrace technology | SJ UK". 5 February 2021. Retrieved 15 October 2024.
  29. ^ "Darktrace signs to McLaren for 2020 F1 season". ComputerWeekly.com. Retrieved 10 October 2022.
  30. ^ "McLaren Racing - McLaren Racing announces extended and enhanced partnership with Darktrace". www.mclaren.com. Retrieved 9 March 2022.
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