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Darktrace stock slumps as early investors sell shares of £187m

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Co-founder and CEO of Darktrace Poppy Gustafsson (L) attends a Q&A. Photo: Getty Images
Co-founder and CEO of Darktrace Poppy Gustafsson (L) attends a Q&A. Photo: Getty Images

Shares in Darktrace (DARK.L), the British cybersecurity company that floated in April, slumped as three early investors sold around 25 million shares, after the firm's strong rise in value since it went public.

KKR (KKR), Balderton Capital and Summit sold shares at a placing of 750p ($10) each, representing a 9% discount of the firm's value at the end of Thursday. The company’s initial public offering (IPO) valued it at £1.7bn ($2.3bn), which equated to 250p a share.

Shares in the business were down 3.4% Friday evening as markets neared closing, at 792p. The sale generated total proceeds of £187.5m, which would have made the sellers a profit of around £125m.

Darktrace was founded in Cambridge in 2013 and uses AI to spot cyber threats for businesses. 

The AI is used to build what it calls an "enterprise immune system" that monitors a company's computer networks to detect unusual activity and then respond to it. The technology stands in contrast to traditional cyber security software that tries to build a wall around networks to block intruders.

Last month, it increased its growth forecast for its 2022 financial year for the second time in as many months, reflecting strong demand for its AI-driven products.

Read more: Tech firms asked to clarify fraud and scam prevention controls

The company, whose shares have increased more than 150% since its IPO, upgraded its outlook after reporting a better-than-expected 41.3% rise in revenue to $281.3m for the year to the end of June.

Its operating loss, however, increased to $38.5m from $24.9m the previous year, mainly due to costs associated with the listing.

At the time, CEO Poppy Gustafsson said: "In this new era of cyber-threat, Darktrace is helping organisations from every industry sector, including providers of critical national infrastructure, to protect their digital assets, and avoid the serious disruption that cyber-attacks can cause," she said.

This comes as it was reported the combined value of UK tech companies founded since 2000 is now £428bn and climbing. 

Large numbers of home-grown tech companies have listed on the London markets in 2021. This includes Deliveroo (ROO.L) and Wise (WISE.L) as well as Darktrace.

Watch: What is a credit rating and why does it matter?

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