Keir Starmer’s decision to appoint Poppy Gustafsson as the UK’s new investment minister is being resoundingly praised despite the former Darktrace boss spending years failing to fully rebuild investor confidence in the embattled company.
Gustafsson, who left her CEO role at the former British cybersecurity darling in September ahead of Thoma Bravo’s acquisition last week, also gets a peerage and will join the Prime Minister at the International Investment Summit on Monday.
Her primary role will be to draw on her business experience to promote the UK as an attractive place to invest and do business.
The PM said: “I am delighted to welcome Poppy Gustafsson OBE as our new investment minister – an accomplished entrepreneur who brings invaluable experience to the role.
“We’re upgrading the Office for Investment to ensure it is fit for purpose and has the capability it needs to make the UK the first choice for investment and the best place in the world to do business, which is central to our mission to drive growth and make people better off.”
Jonathan Reynolds, Secretary of State for Business and Trade, noted that Gustafsson had what it takes to “start and grow a successful international business.”
However, whether Darktrace is the successful international business it’s claimed to be is a matter of perspective.
The business was started in 2013 with backing from the late Mike Lynch’s Invoke Capital, and Gustafsson took the reins in 2016, taking the company public and keeping it on the straight and narrow as it faced waves of controversy and scandal.
In fairness to Gustafsson, much of this was catalyzed by the company’s association with Lynch and, by extension, Autonomy – the company accused of various accounting errors leading to an artificially inflated valuation, leaving HPE with its pants down.
Darktrace’s reputation and valuation were battered after Thoma Bravo pulled out of an acquisition deal in 2022. Share prices plummeted from the dizzying post-IPO highs reached in 2021 and never recovered.
Pouring fuel on the fire, financiers looking at the Autonomy scandal and failed private equity acquisition of Darktrace went searching for skeletons in the company’s closet.
Hedge fund Quintessential Capital Management published a report into the company’s business model in 2023, questioning the validity of its sales figures and leveling various allegations against it related to channel stuffing, accounting red flags, and much more. An independent follow-up EY report found some nondescript issues that Darktrace committed to fixing.
So, to revisit the question of whether the company was successful, a glass-half-full onlooker might say that despite being marred by various controversies, for Gustafsson to sell Darktrace for $5.3 billion is fairly remarkable.
Anyone familiar with Darktrace customers knows that the AI-security shop, which is now delisted from the LSE, does indeed offer some useful products. Gustafsson leaves behind a company revered for its NDR and email solutions that many seem to love – fiddly UI, aggressive marketing, and PR disasters notwithstanding.
AI and tech policy expert Verity Harding said Starmer’s appointment of the former Darktrace boss was “fantastic” and that the UK government is “lucky to have her.”
Calls for subject matter experts to be placed in ministerial roles where their expertise can be utilized best, especially related to tech and cybersecurity, have rung throughout Whitehall for years. The PM’s choice to place Gustafsson in her new role addresses those calls specifically, as did his decision to place Sir Patrick Vallance in the role of science minister over the summer.
Of her new position, Gustafsson said: “It is a huge privilege to be appointed as the minister of investment and I am excited to get started.
“I have first-hand experience of building and scaling a business here in the UK and I am thrilled to have the opportunity to share with the international investment community what I already know to be true; the UK is a great place to do business.”
She will head up the government’s Office for Investment, which is set for an expansion and a small overhaul that will see the Treasury, Department for Business and Trade, and Number 10 jointly tackle the matter of UK investment. ®