Global ambition of Darktrace chief whose firm is a step ahead of hackers

Poppy Gustafsson could hardly be further from the old stereotype of a chief executive who was neither pompous, portly nor pinstriped. She only just turned 40 in the summer, but her zest for life and lack of pretension makes her look even younger.

Darktrace, the cybersecurity company she leads, was founded nine years ago in Cambridge and is staffed by an eclectic band of mathematicians, former ghosts and artificial intelligence experts.

One of the original backers was Mike Lynch, the tech entrepreneur once hailed as the British answer to Bill Gates. His support, which was highly acclaimed in the beginning, has proved to be a very mixed blessing. Earlier this year, he lost Britain’s biggest fraud case ever and is now fighting extradition to the US – but more of him later.

Darktrace is an award-winning innovative company in a rapidly growing industry and Gustafsson has a large number of supporters ready to sing her praises. Directors and advisors include heavyweights such as former BT boss Sir Peter Bonfield; Tory party luminary Lord Willetts; ex-Secretary of the Interior Amber Rudd; and former MI5 Director General Lord Evans of Weardale.

The company ticks all kinds of boxes: a female CEO, innovative technology, a flagship for the UK and a rapidly growing potential market. However, not everyone is convinced. The company has been criticized by City analysts at Peel Hunt and has been attacked by a hedge fund whose founder has been dubbed, ominously, the Dark Destroyer.

Many of the doubts stem from the ties to Lynch.

The software mogul’s connection goes back to the origins of the company, which was founded nine years ago in Cambridge by a group of ex-employees, including Gustafsson, from his former FTSE100 software company Autonomy. Earlier this year, he lost the fraud case in which he was accused of driving up Autonomy’s value before it was sold to US tech giant Hewlett-Packard in 2011.

The tycoon stepped down from the Darktrace board in 2018, but he and his wife are still major shareholders. If he loses a fight against extradition, he could face a long prison term in the United States. He denies any wrongdoing.

Understandably, Lynch is not Gustafsson’s favorite subject. She explains much more in detail how technology is far too important to be left solely to technologists and how she has encouraged an “eccentric mix of talent” at the company, which has 2,200 employees in 47 offices around the world.

The staff consists of an immunologist and a theoretical linguist, who can spot signs of malicious activity, such as shorter sentences, which are often used by criminals to create a false sense of urgency. There’s even a medieval historian on the payroll, Rosie Cooper, who tells me how her studies have given her “interrogation skills” that have come in handy at Darktrace before we turn into a compelling discussion of Edith of Wilton, a tenth-century princess and saint.

Darktrace was one of a series of companies that floated in the London stock market last year, where shares rose initially, though they have since fallen back, along with those of other tech companies.

A common refrain in the UK tech community is that the US is a more sympathetic market with larger capital pools and investors who have a superior understanding of the sector, but Gustafsson protests.

“We have a fantastic cybersecurity heritage in the UK with GCHQ and Bletchley Park. We are very good at that as a country. I’m super proud to be a UK tech company here,” she says. “I want the UK to be heralded as one of the big players in the world.”

Sterling’s recent declines are weighing on the company’s numbers as it reports its results in dollars. However, Gustafsson says she is focused on the long term rather than fixating on the current state of the economy and the turmoil in Westminster.

“It’s very important to see through that. At the moment it is difficult to say what noise is versus what is reality.’ A long-term problem for the UK is the lack of technology companies in the listed markets, as UK companies have been a rich choice for foreign investors.

Recently, Micro Focus signed a deal with Canadian software company Open Text and acquired US-based NortonLifeLock cybersecurity firm Avast. And of course, Hewlett-Packard’s 2011 acquisition of Lynch’s Autonomy is still making itself felt, more than a decade later.

In the summer, news leaked that Darktrace itself was a takeover target for US private equity firm Thoma Bravo, which eventually pulled out without making an offer. “It was a conversation that leaked out very early,” says Gustafsson, “a speculative opportunity that ultimately had no legs.”

“I am very proud and happy to be a UK company, but my sole focus is on this company to achieve everything it can.

“It’s a big ball of potential energy and we’re just desperate to unleash it on the world. As long as those crazy ideas popping up from that R&D department in Cambridge have a chance to see the light of day, that’s the way we’ll be going. Whatever happens, Britishness is ingrained in our DNA.’

She claims that Darktrace’s approach is different from its rivals as it anticipates how a hacker might operate. The new Prevent products launched this summer use artificial intelligence to prevent future attacks.

‘It’s proactive, it shows how an attacker would look at your company. Our team does not stand still or has to re-equip itself every time there is a new threat.’

Given the escalation of cyberattacks, can the good ones really hope to win? “Yeah, this is what we’re doing,” she says, hitting the table for emphasis.

What, I wonder, given the endless capacity of hackers to come up with new strategies, is the most inventive attack she’s seen?

“Oh, that parking meter,” she laughs. ‘Someone linked smart parking meters to a porn website. The parking meters had no screens so they couldn’t display the pornography. It didn’t make sense. But you can never predict what people will do and why.’

Her enthusiasm is infectious, but she has faced some skepticism. Real estate agent Peel Hunt said last fall that some clients had pointed to a “gap between promise and reality” in marketing, claiming Darktrace was underinvesting in R&D. ‘A little skepticism is useful’, she objects. “As long as we keep delivering, it will disappear with time.”

Hedge fund ShadowFall, whose founder Matthew Earl is known as the Dark Destroyer, has also been critical, including about its R&D spending, the turnover of customers to rivals, and its ties to Lynch.

Gustafsson sighs philosophically when asked about the beleaguered billionaire. “He was a founding member nine years ago, but that’s over and we’re a standalone company,” she says. “He doesn’t interfere, I don’t see him.”

While and Darktrace are no longer affiliated at the hip, they aren’t completely divorced either, as Lynch and his wife have a 12 percent stake and his ally Vanessa Colomar has a seat on the board. He remained a member of the company’s science and technology advisory board until earlier this year.

There has been speculation that Lynch may need to sell Darktrace shares to fund his legal bills, which at some point run into millions of pounds a month. Despite these complications, Gustafsson, who has two daughters, ages six and two, feels that she enjoys her job immensely.

‘I love it. It’s like being a parent. There are tough times and it can feel unforgiving, but you care so much.”