Darktrace big hitters in bid to win over investors

Darktrace is set to call on a high-profile roster of heavy hitters as it drums up support for its forthcoming float.

The decision by bosses to push ahead with the London listing, which could value the cyber security firm at £3billion, comes just weeks after fellow tech firm Deliveroo flopped on its debut.

Darktrace’s close links with Autonomy founder Mike Lynch, an early backer who is embroiled in fraud allegations, are also under scrutiny.

Establishment roots: Darktrace founder Poppy Gustafsson, left, Tory peer David Willetts, right, and City veteran Sir Peter Bonfield lead Darktrace

The Cambridge firm has warned investors that a ruling against Lynch in court could harm its reputation and force the sale of his shares in the business.

And it is set to call on a string of City grandees and former government ministers to press the flesh on its behalf.

Former universities and science minister David Willetts, 65, was recently appointed to the board, and ex-BT boss Sir Peter Bonfield is a director who has served on the boards of firms such as Sony and Ericsson.

Other advisers include former MI5 director Lord Evans, senior CIA veteran Alan Wade and former UK home secretary Amber Rudd. They could be key to keeping investors on-side.

Darktrace was founded in 2013 by a group of Cambridge mathematicians and former spies.

Clients range from Rolls-Royce to Coca Cola. But the long-running association with Lynch, 55, could be a thorn in its side.

On the board: City veteran Sir Peter Bonfield

He is in court on both sides of the Atlantic, battling claims that he cooked the books at Autonomy before it was sold to Hewlett Packard for £7billion in 2011.

Lynch denies any wrongdoing. But he is awaiting judgment after a civil trial in the UK’s High Court, while another judge is also set to rule imminently on the separate question of whether the tycoon can be extradited to face criminal charges in the US.

Sushovan Hussain, Autonomy’s former finance chief, has already been prosecuted and jailed by US authorities, while former vice-president Stephen Chamberlain has been charged.

Chamberlain is a Darktrace employee, serving as operating chief, although he is currently on administrative leave.

In recent years, Lynch has distanced himself from Darktrace. He stepped down as a director in December 2018 after a US grand jury charged him with 14 counts of conspiracy and fraud.

But he continued to sit on Darktrace’s advisory board until last month and still sits on its science and technology board.

Darktrace and Lynch remain linked in other ways. The firm’s boss, Poppy Gustafsson, is a former Autonomy executive who worked under Lynch, as is her former co-chief Nicole Eagan.

Along with Lynch and Hussain, Eagan founded Invoke Capital, which became Darktrace’s first financial backer with a £10,000 investment eight years ago.

Since then Invoke has provided extensive help to Darktrace, and key figures such as Gustafsson, Eagan, technology chief Jack Stockdale and marketing chief Emily Orton were moved across from it.

Since 2018, Invoke has been paid roughly £6.5million for services to Darktrace, according to the firm’s registration document.

Darktrace has taken steps to distance itself from Lynch and Invoke, including paying £1.2million to terminate their relationship.

And it has warned its remaining exposure to Lynch still presents risks. He and his wife, Angela Bacares, own roughly 19 per cent of the firm and could make £570million from the listing.

But Darktrace said that if Lynch’s legal jeopardy worsens, he may have to sell his shares, undermining the stock price. It also warned that if he is found guilty in the US, Darktrace could face money-laundering charges. 

Eagan, who is strategy chief, was previously questioned as part of US inquiries into Autonomy. There is no suggestion of wrongdoing on her part.

Gustafsson on Monday said Lynch has ‘no involvement in the day to day running of the company’. If questions persist, however, she may find that an increasingly tricky tightrope to walk.

This post first appeared on Dailymail.co.uk