Poppy Gustafsson addressed a group of investors last year and said: “An attack, after being foiled, should remove all the tendrils of contamination.”
“This is a human-intensive task prone to human error and insufficient vigilance,” added the CEO of the cyber security group. DarktraceOne of the most well-known start-ups in the UK.
News this week that technology-focused private equity group Toma Bravo is Examining a quote Taking Darktrace private is a vote of confidence in a company that faces some skepticism about its growth prospects as well as risks to its reputation, the tendrils of which have been difficult to remove.
It was found that two of its founding investors fraudulently inflated God their company value In the largest case of its kind in British history.
Mike Lynch and Sushoban Hussain were accused of falsifying financial facts and documents in preparation for the $11 billion sale of Lynch’s Autonomy software company to Hewlett-Packard in 2011. Hussain was found guilty and sentenced Five years in prison in the United States.
In January, Lynch lost a high-profile civil lawsuit brought by Hewlett Packard Enterprise, the judge who found civil fraud against him and Hussain. British Home Secretary Priti Patel has approved the extradition of Lynch – who denies any wrongdoing – to the US to face trial.
Gustafsson charted a path between protecting her former colleagues while making efforts to distance herself and the company from the founder of Autonomy and the potential reputational impact of the association.
She offered written testimony and was cross-examined during Lynch’s civil fraud trial, and she wrote a letter to the judge in Hussain’s defense, describing him as a close friend. Darktrace did not respond to a request for comment on its defense.
Lynch, who was a director of Darktrace until 2018 and a consultant until 2021, still holds around £158m of stock.
Tech investor Michael DiMello said he believes Darktrace’s relationship with an executive tainted by fraud is a “drag” on the company’s reputation and investor confidence. But he added that Gustafson was a “sound man” and “seemed to show up.”
career b cyber security And a rapid rise through the ranks of British technology was not the obvious goal for Gustafsson. The 39-year-old grew up in Cambridgeshire, where her father ran an agricultural sales business and her mother worked as a journalist for Farmers Weekly. After studying mathematics at the University of Sheffield, she trained in accounting at Deloitte.
But her next job was the one that would shape her career—a three-year stint as corporate controller at Autonomy.
Hussein and Lynch and a number of other former Autonomy executives founded Invoke Capital in the summer of 2012, a year after Autonomy’s ill-fated sale to HP. Darktrace was founded the following year by a number of mathematicians and British spies from MI5 and GCHQ. Invoke funded the company and helped bring in some former Autonomy staff to run the program.
Set to become the young startup’s CFO at the age of 30, she was soon promoted to co-CEO of Darktrace in 2016, then CEO in 2020. She was awarded an OBE in 2019 and guided the company through the listing Her successful public in April last year.
Cambridge-founded Darktrace typically uses the immune system as an analogy to describe its cybersecurity software, which uses artificial intelligence to identify new threats and defeat them. The company, whose clients have included Rolls-Royce, Drax, the City of Las Vegas and the UK’s NHS, has taken advantage of a booming cyber security market in recent years.
A former Darktrace employee said Gustafson “doesn’t believe in hearing about roadblocks and then giving up on things.”
A long-time investor in the company described her as “very telling”, adding: “Popi is not very aggressive – she is soft . . . but she managed the sales machine to make it work exceptionally well.”
Darktrace has seen strong growth over the past five years, with revenue increasing from $79.4 million in 2018 to $417 million last year. Today it boasts about 7,400 customers, most of them small to medium-sized companies.
But not everyone is convinced. Last October, the stock plunged after brokerage Peel Hunt published a letter claiming the company was worth half its market value, because the potential market it was targeting was not as large as the company claimed.
The news about the preliminary discussions with Toma Bravo helped him to recover. Shares are up 28% since then, while the stock is up 64% since its IPO.
Some remain skeptical. British hedge fund ShadowFall, which has a short position in the company, also believes Gustafson continues to overestimate Darktrace’s potential customer base. Last year, it claimed that more than 150,000 companies would benefit from Darktrace’s Immune System AI software.
“We’re struggling to convince ourselves that Darktrace is investment grade,” said Matt Earle, managing partner at ShadowFall.
Some former employees have criticized what they say is an aggressive marketing and sales strategy. ShadowFall and competitors have also questioned why Darktrace spends so much less on research and development than some of its peers.
Rival cyber security firm Vectra teased Darktrace last year in a now-deleted webpage which claimed that “instead of investing in innovation, Darktrace spends on F1 sponsorships and slick marketing campaigns”. She added that Vectra spends about 40% of its revenue on R&D, compared to 10% by Darktrace.
A person close to Darktrace noted that the nature of the company’s AI means it doesn’t require a large and expensive team of engineers.
The investor claimed that “dumb British investors” rarely price tech stocks accurately and that Darktrace is undervalued by the market. They added: “I hope the Toma Bravo thing doesn’t happen because I think there is another positive side, but at least it will erase their board from autonomy.”
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