Veteran Darktrace chairman to step down ahead of $5bn float

·3-min read

The veteran chairman of Darktrace is to step down ahead of a stock market flotation that its owners hope will value the cybersecurity company at $5bn (£3.8bn).

Sky News has learnt that Darktrace has approached candidates to take over from Robert Webb, a former general counsel of British Airways, who has chaired the company since 2014.

The search is understood to be well-progressed, with an appointment possible in the next two months, according to people close to the company.

News of Mr Webb's planned retirement comes as Darktrace firms up plans for a London listing, with UBS, Jefferies and Berenberg appointed to oversee the float.

Its IPO is taking place against the backdrop of American authorities' efforts to extradite Mike Lynch, Darktrace's first investor, to face criminal charges relating to the sale of software company Autonomy in 2011.

Boris Johnson said this month he was satisfied that the extradition agreement between the two countries was working as it should amid protests from allies of the entrepreneur.

Mr Lynch stepped down from the Darktrace board in 2018, but retains close ties to Mr Webb, who formerly chaired Autonomy and still chairs Luminance, another of the companies backed by Invoke Capital, Mr Lynch's investment vehicle.

A Darktrace spokesman confirmed the search for a successor to Mr Webb, saying: "Last year at the age of 72, Rob informed the board of his intention to retire, having served as chairman sine 2014.

"As part of reorganising Darktrace for the next stage of growth, there is a process underway to transition to a successor, which is near completion."

The company is targeting a flotation in the coming months, and finalised its banking syndicate after some US banks rejected the chance to participate in the float amid unease about the legal implications of the extradition attempt.

Some firms raised questions about whether underwriting the float could constitute a potential breach of Britain's Proceeds of Crime Act.

Bankers also questioned their ability to participate in the IPO process because Sushovan Hussain, the former Autonomy finance chief and a Darktrace shareholder, was sentenced to five years in a US prison for fraud in May 2019.

Mr Lynch faces an extradition hearing next month following the decision by US authorities to charge him with 17 counts of securities and wire fraud.

The businessman submitted himself for arrest in February and was granted bail in return for £10m security.

Mr Lynch has always denied the charges against him.

The entrepreneur has also relinquished some of his other board roles but remains involved with start-ups such as Luminance, a law-focused AI company.

Darktrace has established itself as an international leader in the provision of artificial intelligence (AI) cybersecurity services.

The company recently named Poppy Gustafsson - herself a former Autonomy colleague of Mr Lynch - as its sole chief executive, ending a joint leadership structure with co-founder Nicole Eagan.

Headquartered in Cambridge, Darktrace supplies software to corporate customers, helping them to detect abnormal behaviour on their networks.

It said last year that it had passed $1bn in "cumulative bookings", suggesting that its order-book has been substantially boosted by the coronavirus-inspired switch to remote working for millions of employees of multinational companies.

Growing demand for its products has underpinned some of its investors' appetite to buy more Darktrace stock, with recent cyberattacks on companies such as easyJet and Honda again reinforcing the extent to which the security of multinationals' networks and data is now a fixture on boardroom agendas.

Darktrace employs more than 1200 people, and operates from 44 offices, with dual headquarters in Cambridge and San Francisco.

Its blue-chip corporate customers have included AIG, BT Group, Jimmy Choo, the Science Museum Group and William Hill.

Cybersecurity companies which have floated in the US, including Crowdstrike, have seen their shares surge immediately after listing, stoking Darktrace's hopes of a bumper valuation.

If it does go public, Darktrace would join other technology companies - including Deliveroo and Trustpilot - which have drawn up similar plans.