Mike Lynch's Darktrace bags $65m funding boost

Darktrace says capital injection is 'strong validation of technology', but analyst voices concern that cybersecurity start-up is being over-hyped

Darktrace's valuation has swelled to a reported $400m (£310.6m) after the British cybersecurity start-up snagged another $65m in funding.

Founded in 2013 with the backing of Autonomy founder Mike Lynch's Invoke Capital fund, Darktrace claims it has already amassed 1,000 customers for its Enterprise Immune System, which is designed to thwart cyberattacks using advanced maths and machine-learning techniques.

The Cambridge-based vendor said it now has 300 employees and achieved more than 600 per cent revenue growth in its last financial year.

Its total funding now stands at over £100m, with Lynch's Invoke initially pouring £20m into the firm ahead of a $22.5m round of Series B funding last July.

Darktrace CEO Nicole Eagan said the addition of KKR as a backer is "strong validation of the technology we have developed".

Despite this, analyst Megabuyte argued there is a "sense of Autonomy-style hype about Darktrace that makes us slightly uneasy", referencing the spectacular fallout between Lynch's (pictured) previous venture and HP, which acquired it in 2011 for $10bn.

But Megabuyte added: "With substantial new funding, it seems likely that the next few years will bring more strong growth and that the Darktrace brand will grow rapidly in stature. And before we let our cynicism get the better of us, we should also remember that Autonomy made its investors a very substantial return over a long period of time, and it only actually went wrong at the hands of HP."

The latest round of funding also features participation from existing investor Summit Partners and new investors TenEleven Ventures and SoftBank-affiliated SB ISAT Fund.

Han Sikkens, managing director of Summit Partners, said: "[Darktrace's] Enterprise Immune System technology has been adopted by some of the most respected and cyber-conscious companies the world over and we believe it serves as a crucial element of these organisations' cybersecurity operations."