Darktrace Said to Hit $1.25 Billion Valuation in Stock Sale

(Bloomberg) -- Two early investors in Darktrace Ltd. sold some of their shares in a secondary sale, valuing the British cybersecurity company at $1.25 billion, according to a person familiar with the plans.

European private equity firm Vitruvian Partners acquired the shares, said the person, who asked not to be named discussing a private transaction. The company was most recently valued at $825 million in July. The secondary sale was completed last month, said the person. Representatives for Vitruvian Partners in the U.K. couldn’t be reached for comment.

Darktrace was founded in 2013 by mathematicians from the University of Cambridge and veterans of the U.K. and U.S. intelligence agencies, with initial funding from Invoke Capital, the venture capital fund run by Mike Lynch, founder and former chief executive officer of Autonomy Corp.

The company uses machine-learning technology to analyze customers’ network traffic. It builds a picture of what the system normally looks like and tries to quickly detect unusual activity that could indicate a hacker was lurking in the network, or an employee abusing access privileges.

Poppy Gustafsson, a Darktrace co-founder and chief executive officer for Europe, the Middle East and Africa, said she was delighted to have Vitruvian Partners as a new investor. "They share the vision of seeing this become a multi-billion dollar company," she said.

Darktrace currently has more than 650 employees and is continuing to hire rapidly, Gustafsson said. "Since our last funding round, it’s been foot-to-the-floor on growth here," she said.

She said the company’s product was currently deployed on 5,000 corporate networks. In the past year, Darktrace, which already had a presence in most regions of the world, has expanded into Latin America. It’s also moved into the manufacturing and energy sector, where it’s being used within industrial control systems, Gustafsson said.

Darktrace competes with several other cybersecurity companies, including U.S.-based Vectra Networks and Palo Alto Networks, which produce machine learning-based threat detection software.

Many of the company’s original directors were also alumni of Autonomy, which Hewlett-Packard bought in 2011 for $10.2 billion. HP subsequently wrote down $8.8 billion of the company’s value and accused Lynch and others of engaging in accounting fraud, claims that Lynch has denied.

To contact the reporters on this story: Nate Lanxon in London at nlanxon@bloomberg.net, Giles Turner in London at gturner35@bloomberg.net, Jeremy Kahn in London at jkahn21@bloomberg.net.

To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Molly Schuetz

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