The Creation of Darktrace

In November 2021, Darktrace, a company Invoke and I had started only eight years previously joined the FTSE100. It had a market cap of 5 Billion pounds and was a fast-growing international business. Its share price was up over 100% from its IPO of 250p in April 2021. As Darktrace reaches this important milestone, I am led to reflect on the early days and how one of the UK most important tech companies was created back in 2012.

The seed of the idea that led to Darktrace had first come to me a couple of years earlier when I sat on the Board of the BBC. As the one technology person among the non-executive directors, I was approached with a particularly difficult problem. It turned out that certain members of staff were looking up the salaries of celebrities and leaking them to the press. This set me thinking. Most of the contemporaneous orthodoxy for cyber defence at the time was about keeping “bad” people out of an organisation, but this approach forgot that each day many were let in as employees or contractors – the ‘insiders’. This old-fashioned approach appeared to me to be the cyber security equivalent of medieval castle wall defence of towns: it was obviously flawed as everyday so many people walked straight through the castle gates. Of these ‘insiders’ who could pose a threat to the city fortress, some were malevolent, some just plain dumb.

To keep with the analogy, we needed a system that was intelligent enough to walk around inside the castle and spot things that didn't look right. This in turn reminded me very much of how our own human immune system functions, which I had studied whilst doing AI research at Cambridge University. I realised that we could use AI to create something that would learn what is ‘self’, and therefore spot the ‘other’. We gave it a name: the Enterprise Immune System (EIS), and a new approach was born.

In the Autumn of 2012 a group of technology veterans met up. Over the years, we had founded and worked together at a number of business that had become world-class unicorns. Together, we started Invoke, an organisation designed to leverage our expertise in monetising the incredible science base in the UK and thus create more world-class companies.

Unlike a normal VC, we were mostly experienced technology people. Our goal was not just to invest money but actively mould, and in some cases even come up with the idea and create the technology and even start the company. Darktrace was such a case.

A presentation on EIS and this radical new cyber security idea was put together and we went about collecting a team within Invoke to make this new approach a reality.

In October 2012 , a superb technology expert I had worked with over the years, Jack Stockdale, joined Invoke’s internal incubator, DVL, and we started working on creating this  fundamentally different technology.

Pretty soon we bought in other people to work on the project, amongst them many old hands and experienced friends. Nicole Eagan and Emily Orton, both of whom would go on to be C-level executives at Darktrace, joined Invoke. DVL was also working on some projects for the UK intelligence services which meant we also had exposure to people who were experts in the operational side of the problem.

Darktrace’s founding product and positioning were created in the early days within Invoke.

A few months later in February 2013, an accountant from one of my previous companies who was, luckily for us, returning to work part-time after the birth of her first child joined DVL. Over the years that person, Poppy, had an impressive growth trajectory that would lead her to becoming the company’s CEO.

In June 2013, Jack and the Invoke technology team reviewed the latest product and Invoke decided it was time to form the company. After a few near misses with a number of dubious names, I came up with the names Darktrace and the Enterprise Immune System.

Poppy filled out the relevant paperwork and sent it off to Companies House and Darktrace was formally incorporated, initially as a wholly-owned subsidiary of Invoke. Invoke transferred the relevant Intellectual property, code, and product to Darktrace.

Jack moved over to Darktrace along with some of the developers that we had hired, whilst others in the Invoke team started running the business day-to-day.

A month later, some of the people who had been working in the UK government were so impressed with the technology that they joined Darktrace, including Nick Trim, who is now the COO. That put the business in an incredibly strong position of having both the very best technical people and the very best operational people, together in one company.

In practice, this approach meant that the management experience and expertise of the Invoke team allowed Jack and his developers to concentrate on making the magic happen. Invoke handled day-to-day management, fundraising, and recruiting.

This model could only work because of the years of experience gained by the Invoke management team, which was running the business day-to-day, but with the intention that over time the knowledge they had accumulated over the years was being transferred to the people within the start-up. The motto was that we have made loads of mistakes over the years, and we need you to make new and exciting ones. In an ecosystem like the UK, that does not boast Silicon Valley’s rich rolodex of experienced technology executives to join start-ups, this Invoke model is particularly effective.

In November 2014, Poppy transferred to Darktrace, initially as CFO, followed in time by other Invoke employees that were running Darktrace. The new team had learnt the skills they needed, such as how to run the sales force, customer support and marketing from the old hands. As Darktrace grew, more of the Invoke people moved over to join Darktrace.

In 2015, Darktrace completed its Series A funding with outside investors (Talis, Hoxton Ventures and others) and in 2016, Darktrace completed its Series B funding with outside investors (Summit Partners and others).

For the next chapter in the company’s history, Invoke came up with idea for the new product: a radical idea creating a software that could fight back during an attack. We named it Antigena.

As Darktrace scaled up, the experience of the Invoke team meant it was in a position to anticipate the challenges of each stage of growth. Over time, Invoke gradually backed out and handed over management to the Darktrace executives.

In 2016, Poppy appointed as Darktrace Co-CEO. A couple of years before the IPO, Invoke ceased any management role and Darktrace was ready to plot its own course in the world.

It has been a pleasure to see some of the people that joined in the early days from different worlds, often who had little experience of the commercial realities of running a tech business, not only learn but becomes real pros. More importantly, however, I believe this is a model for unlocking the potential of countries with great science bases like the UK, allowing them to create world-class impactful technology businesses.

By Dr Mike Lynch OBE FREng FRS