Darktrace, a British Cybersecurity firm, recently managed to fundraise $50 million in a financing round that raised the startup’s valuation to $1.65 billion.
The investment was led by Vitruvian Partners, a European private equity company, with the support of other existing companies like TenEleven Ventures and KKR.
Established back in 2013, the Cambridge-based Darktrace leverages both machine learning and artificial intelligence technology in detecting and countering cyber threats.
The firm’s recent investment marks a Series E round of funding, which is the fifth leading financing exercise of any venture.
According to Darktrace, its technology dubbed the Enterprise Immune System performs in a similar manner to the human immune system.
In fact, it utilizes a computer algorithm not only in monitoring patterns but also adapting to understanding what makes up suspicious and normal cyber behavior.
What’s more, the company utilizes what is referred to as autonomous response technology in automatically responding to threats. Also, Darktrace recently unveiled its second version of the technology, which is known as Antigena, aimed at dealing with malicious emails.
Darktrace first surpassed the $1 billion valuation mark back in May, when it hit $1.25 billion market value. This feat catapulted the startup into the ranks of unicorns. The recent valuation of $1.65 billion represents a 32% increment in the past four months.
The recent financing comes during a period of rapid growth for both AI and Cybersecurity industries.
Gartner, an IT research group, predicts growth in the Cybersecurity spending to hit $114 billion in 2018, which will mark a 12.4% increment from the previous year. The group also projects the total business value of artificial intelligence (AI) to reach $1.2 trillion in 2018, a 70% spike from 2017.
Investment to Finance Expansion
The new investment round follows a secondary sale of shares that was held by the startup in May, primarily when Vitruvian Partners acquired a stake of Darktrace. Earlier in 2018, Darktrace’s stock sale helped in lifting the company’s market value to $1.25 billion at the time.
“They have got a really good record investing in high-innovation firms, especially in high-growth markets. So given our objective, which is we have to increase our global footprint and expand into those different regions, that’s something they were able to support us with,” Darktrace Co-Chief Executive Poppy Gustafsson, who manages the startup alongside Nicole Eagan, said about the investment firm in an interview hosted by CNBC.
According to Gustafsson, Darktrace will mainly utilize the additional financing to push its global expansion into various markets like Latin America and Asia.
Prioritizing Growth at the Expense of Profit
On the financial side, Darktrace is yet to become a profitable enterprise. However, Gustafsson is convinced that the reason for such is because the firm is currently in a high-growth phase and prioritizing growth and recruiting over profitability.
Gustafsson said: “We could switch off that growth and we would be profitable, but we’re in a fortunate position where our investors are backing us to continue to expand and really reach that demand.”
During the announcement of the investment, Darktrace disclosed that the firm had experienced an increment of 60% in its total staff headcount in the last one year, with over 750 employees globally.