Cybersecurity startup Darktrace is set to go public in London next month at a lower valuation than previously expected, as noise surrounding one of its founding shareholders causes concern.
Darktrace will target a valuation of as much as £1.9bn, Bloomberg reported, a marked reduction from the £3bn figure that the City had previously forecast.
The terms of the deal will offer Darktrace shares at a range of 220p to 280p, with up to 65.1 million shares on offer at a capital raise of $200m. It is set to list on the London Stock Exchange’s premium market on 5 May.
The move follows a spate of negative press about one of Darktrace’s former long-time board members and founding shareholder Mike Lynch, who is battling extradition to the US on fraud charges.
In its registration filings with the London Stock Exchange earlier this month, Darktrace said the charges against Lynch “could result in a material adverse effect” on its business and stock market prospects.
A spokesperson for Darktrace declined to comment.
Lynch co-founded software firm Autonomy, before selling it to Hewlett-Packard in 2011 for $11.7bn. HPE later accused Lynch and former Autonomy management of inflating the company’s value and financials before it was bought.
After leaving HPE following the Autonomy acquisition, Lynch founded his investment vehicle Invoke Capital. Darktrace was its maiden investment, and Lynch continues to have a role at the cybersecurity company as a member of its science and technology council.
Darktrace and its advisers are also said to be concerned about over-inflated valuations in the wake of food delivery app Deliveroo’s IPO last month, Sky News reported. Deliveroo, which was valued at £7.6bn before floating, saw its share price fall as much as 30% on its first day of trading.
Founded in 2013 and headquartered in Cambridge, Darktrace was an early pioneer in using artificial intelligence and machine learning to identify cyber threats for businesses and governments.
The company has close ties to financial services, with more than 4,700 customers in over 100 countries and 1,500 employees.
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