What's going on?
So much for “crime doesn’t pay”: Darktrace announced on Monday it was planning an initial public offering (IPO) that’d value the British cybersecurity firm at as much as $4 billion.
What does this mean?
The UK’s been nervous about the future of tech IPOs in London ever since the Deliveroo calamity a couple of weeks ago, when shares of the much-hyped food delivery company collapsed on their debut. So Darktrace’s announcement that it’ll list on the London Stock Exchange is being welcomed with open arms, not least because the fast-growing company – which uses artificial intelligence to detect and respond to cyber threats – saw its sales climb 45% last year.
Darktrace is now hoping a successful stock market debut will raise enough money to put the firm ahead in the $40 billion global security market. And investors are feeling optimistic too, especially since it’s steering clear of the dual-share classes that give company executives more power than the average investor – which might be one of the reasons for Deliveroo’s downfall.
Why should I care?
For markets: European IPOs are back.
Darktrace joins a flurry of European listings announced this month, including – in what could be two of the region’s biggest deals this year so far – fund supermarket platform Allfunds and Swedish payments company Trustly. That’s breathing new life into Europe’s IPO market, which recorded its strongest quarter since 2015 in the first three months of 2021.
The bigger picture: More money means fewer problems.
IPOs are big business on both sides of the Atlantic, as companies look to raise serious money from investors to fund their expansion plans. And they’ve picked a lucrative time to try: according to Bank of America, investors have plowed $569 billion into global stock funds over the last five months – more than the previous 12 years combined.