The incredible life of Mike Lynch, the Cambridge academic who sold his search startup to HP for $11 billion
- Mike Lynch, the 52-year-old British tech Goliath behind one of Britain’s most successful tech companies, is an ambitious, intellectual powerhouse.
- Described as Britain’s Bill Gates by The Sunday Times, Lynch has been under the spotlight ever since he sold his big data company, Autonomy, to HP for $11.7 billion (£8.7 billion).
- Following the acquisition, HP sued Lynch for fraud, alleging that he inflated Autonomy’s revenues by $700 million (£552 million) before the deal.
- Lynch then counter-sued, leading to an intense legal battle that continues today.
- When Lynch isn’t fighting HP, he’s focused on spotting the next generation of tech startups that have the potential to grow into multi-billion dollar companies like Autonomy through his $1 billion (£770 million) venture capital company, Invoke Capital.
He has been described as Britain’s Bill Gates.
@Frostbite_News: The incredible life of Mike Lynch, the Cambridge academic who sold his search startup to HP for $11 billion
Mike Lynch, the 52-year-old British tech Goliath behind one of Britain’s most successful tech companies, is an ambitious, intellectual powerhouse.
Described as Britain’s Bill Gates by The Sunday Times, Lynch has been under the spotlight ever since he sold his big data company, Autonomy, to HP for $11.7 billion (£8.7 billion).
Following the acquisition, HP sued Lynch for fraud, alleging that he inflated Autonomy’s revenues by $700 million (£552 million) before the deal. Lynch then counter-sued, leading to an intense legal battle that continues today.
Autonomy’s first attempt to commercialise its technology was in a consumer product. It featured a virtual dog that would take commands to help internet users manage information.
However, soon after it launched, corporates started buying the technology in large numbers.
This, coupled with the emerging trend of free consumer products online, was enough to persuade Lynch to shift towards concentrating on corporates. It was a key strategic move for Autonomy.
Chandratillake told Business Insider: “Mike is a uniquely talented entrepreneur, especially within the European ecosystem. It’s rare to find someone who is a PhD in data science but also a visionary product marketer and talented organisation builder.
“I learned a great deal about business, product, marketing and the competitive element that is at the core of really successful organisations through the opportunity I had working for him as Autonomy’s US CTO. Years later when he sold the company to HP, I wasn’t surprised that it was the largest AI exit ever (still the case) and one of the top three technology exits from Europe in history (still the case).”
Autonomy made a number of other sizable acquisitions including: search software rival Verity ($500 million, December 2005); email archiving and litigation support company Zantaz ($375 million, July 2007); records management software firm Meridio Holdings (£20 million, October 2007); enterprise content management firm Interwoven ($775 million, January 2009); and online backup provider Iron Mountain Digital ($380 million, May 2011).
In January 2015, the SFO dropped its case against HP. It said a lack of evidence would make it difficult to prosecute.
In May 2015, HP unveiled full details of the acquisition. It said that Lynch inflated revenues by $700 million (£541 million) over a two-and-a-half year period and they sued him and Autonomy for $5.1 billion (£3.9 billion).
In October 2015, Lynch counter-sued HP in London’s High Court for more than $150 million (£116 million) over the allegations of massive fraud it levelled against him. Lynch accused Whitman of trashing his reputation and hampering his venture capital fundraising efforts.
Commenting on the fallout between HP and Autonomy at TechCrunch Disrupt last December, Lynch said: “It’s a sad thing that happened in the end.”
He added: “The UK model is there’s no way of stopping a takeover. So when Hewlett Packard came along and wanted to make its offer, we couldn’t stop them. The people that were doing it at the time, Leo and Shane (head of strategy), had an amazing strategy. What they wanted to do was to take the company, refocus it into this new age of big data and software and machine intelligence and that was exciting and we got convinced by them.
“We could see the future was that way. The problem was the week after the deal they get fired and we’re left with a hardware group that used to call us the step-child. All the understanding of clever, high growth, software people wasn’t there.”
The Invoke Capital fund was announced in February 2013 and Lynch is using it to invest in up and coming UK and European tech firms. So far it backed around 10 technologies, according to Lynch, with tens of millions of pounds spent. However, only four companies are listed on the Invoke Capital website.
“I’ve got about 60 of the people from Autonomy that work with me at Invoke,” Lynch said at TechCrunch Disrupt. “We raised a billion and now we go out and invest in European tech.”
He added: “We raised our billion and what we’re doing is taking bright ideas from bright people and turning them into impact and reality.”
The company’s technology, which can spot unusual email activity and suspicious file uploads, is underpinned by complex maths that was developed at Cambridge University.
“The reason I liked it was that it was a completely new approach,” said Lynch during a phone call with Business Insider last July. “Most of what’s out there in cybersecurity is based on knowing what you’re looking. So things like anti-virus and that sort of stuff or trying to build a big wall around the outside of your company, a boundary.
“The problem is that the world’s moved on and the attacks no longer have signatures. You can get kits that make attacks that don’t look like anything that’s been done before. But also every day you allow loads of people to walk through your wall and so the wall is pretty porous. The reality I was familiar with from some of my other roles as directors of large companies is that it’s very, very hard to keep stuff out. The reality is almost every company is infiltrated. So you have to take a different approach. You have to do it much more like an immune system.”