LONDON (Reuters) -Darktrace, the British cyber security firm backed by tech entrepreneur Mike Lynch, said on Monday it intended to float on the London Stock Exchange to raise new funds to accelerate product development and strengthen its balance sheet.

The company, founded in 2013, uses AI to understand IT networks and detect attacks by identifying aberrations to normal behaviour.

Revenue grew from $79.4 million to $199.1 million between its 2018 and 2020 fiscal years, it said, while core earnings improved from a $27 million loss to a $9 million profit over the same period.

Lynch was the founder and chief executive of Autonomy, the software company sold to Hewlett-Packard in an ill-fated $11 billion deal in 2011.

He is fighting a U.S. extradition request to face fraud charges related to the deal, and is waiting for the verdict of a multi-billion dollar civil claim by HP at London’s High Court. Lynch denies the charges.

Darktrace joins a flurry of deals, with Madrid-based Allfunds targeting an Amsterdam IPO and Sweden’s Trustly on Monday announcing its bid for a Stockholm listing in what could be two of the biggest deals in Europe this year so far.

The European IPO market recorded its strongest quarter since 2015 in the first three months of 2021, including tech and e-commerce companies such as Poland’s InPost and Germany’s Auto1.

But a debilitating debut for Deliveroo — shares dropped 30% on the first day of trading — cast doubts on whether the momentum could last.

Darktrace said it expected to have a free float of at least 20% of issued share capital and in addition shares representing up to a further 15% of the offer will be made available pursuant to an over-allotment option.

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As well as the primary offer, it said there would be a secondary sell-down of shares by existing shareholders.

Reporting by Paul Sandle and Abhinav Ramnarayan; Editing by Kate Holton/Guy Faulconbridge/Kirsten Donovan



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