Business Blog: Mike Lynch’s legacy

Mike Lynch leaves a complex, still-unfolding legacy

August 26, 2024

It was a tragic, complicated end to a colorful, complicated life—a life still shrouded in layers of complexity.

When Mike Lynch, described at one time as Britain's Bill Gates, passed away last week, it was a shocking turn of events that would have sounded like a plot twist in an HBO show if it hadn't been starkly real. Lynch was originally among six people listed as missing in the aftermath of an accident that sank a superyacht, named the Bayesian, in the Mediterranean. Lynch's 18-year old daughter also died in the accident.

Lynch was only 59, and was just embarking on a new chapter in his life: He had just been acquitted on all charges in a fraud case that played out for more than a decade, and was on the Bayesian with friends, celebrating the turning page.

Lynch was an unlikely tech founder in an unlikely place, as my colleague Ryan Hogg writes:

Lynch was born in Ireland and raised in Chelmsford, Essex. His mother was a nurse, and his father was a firefighter. Speaking in 2016, Lynch said his father gave him the advice to "get a job that doesn't involve running into burning buildings."

Lynch's software company Autonomy would prove to be both his making and his albatross. The startup—focused on enterprise and in part built on Bayesian inference methods (hence, the name of the yacht)—grew rapidly after Lynch cofounded it in 1996. Autonomy did a number of high-profile acquisitions through the 2000s, and was acquired by HP in 2011 for more than $11 billion. That's where things get complicated: HP wrote the investment down by $8.8 billion just a year later, citing "accounting irregularities." This kicked off a legal battle that would last for years in which HP accused Lynch of fraud, while Lynch consistently denied the charges. Autonomy's former CFO was found guilty of fraud in the U.S. in 2018.

But in July, Lynch was acquitted on all 17 charges brought against him. And on the yacht, Lynch was said to be celebrating his new lease on life.

Lynch leaves behind a complex legacy, and some outstanding questions. He, through his VC firm Invoke Capital, was an early key investor in cybersecurity company Darktrace, which Lynch first invested in in 2012. As my colleague Leo Schwartz writes:

One of its most profitable investments was Darktrace, a cybersecurity firm that shared deep connections with Autonomy, including, as of early 2020, half of Darktrace's board and six of its eight top executives. Lynch and his wife held a combined stake of around 7% in Darktrace as of April 2024.

In part thanks to its ties to Autonomy, Darktrace soon became mired in scandals, including a Forbes investigation that alleged widespread sexual harassment. Despite the bad press, Darktrace went public in April 2021, with its price soaring from an initial valuation of $2.4 billion by 43% on its first day of trading.

The honeymoon didn't last. In September 2022, discussions of an acquisition between Thoma Bravo and Darktrace fell through, sending share prices tumbling. And then in early 2023, the short-selling firm Quintessential Capital Management published a 70-page report accusing Darktrace of similar misconduct that had sunk Autonomy.

Thoma Bravo announced plans to acquire Darktrace in April for $5.3 billion, a deal that's likely to proceed as planned, as my colleague Luisa Beltran reports:

The deal still needs regulatory approval, but Thoma Bravo is expected to complete the acquisition by the end of 2024, a person familiar with the transaction said.

"If the shares have already been voted, there is no obvious mechanism or need for further approval or action to be taken by any shareholders, including the Lynch family or estate," an attorney who advises on M&A transactions told Fortune.

Lynch's passing may not change the outcome for Darktrace, but it does highlight the harsh reality that even when we get second chances, we never know how long we have to make the most of them.

See you tomorrow,

Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
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Nina Ajemian curated the deals section of today's newsletter.

VENTURE DEALS

- Siepe, a Dallas, Texas-based software and technology services provider for asset management, raised $30 million in Series B funding from WestCap.

- Tilt, a London, England-based real-time shopping platform, raised $18 million in Series A funding. Balderton Capital led the round and was joined by existing investors TQ Ventures, Earlybird and Seedcamp.

- Solace, a Redwood City, Calif.-based digital health platform, raised $14 million in Series A funding. Inspired Capital led the round and was joined by Anne Wojcicki, Susan Wojcicki, RiverPark Ventures, existing investors Craft Ventures and Torch Capital, and others.

- Workpay, a Nairobi, Kenya-based HR, payroll, and benefits platform, raised $5 million in Series A funding. Norrsken22 led the round and was joined by Visa, Plug n Play, existing investor Y Combinator, and others.

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EXITS

- Agilysys acquired Book4Time, a Markham, Canada-based spa management SaaS technology provider, from Serent Capital. Financial terms were not disclosed.

OTHER

- Podimo acquired Tonny Media, an Amsterdam, Netherlands-based podcast production company. Financial terms were not disclosed.

IPOS

- Bicara Therapeutics, a Boston, Mass.-based targeted therapy biotech company, filed to go public on the Nasdaq. Biocon, RA Capital Management, Red Tree Venture Fund, Omega Fund, Invus Public Equities, and TPG back the company.

- MBX Biosciences, a Carmel, Ind.-based peptide therapeutics biotech company, filed to go public on the Nasdaq. Frazier Life Sciences, New Enterprise Associates, OrbiMed Advisors, Deep Track Capital, Wellington Management Company, Norwest Venture Partners, and RA Capital back the company.

- Zenas BioPharma, a Waltham, Mass.-based immunology-based therapies biopharmaceutical company, filed to go public on the Nasdaq. The company posted $50 million in revenue for the year ending June 30, 2024. Xencor, Enavate Sciences, SR One, Longitude Capital, Tellus BioVentures, Fairmount Funds Management, New Enterprise Associates, Norwest Venture Partners, and Bristol-Myers Squibb Company back the company.