Stuart Paterson, a founding partner at venture capital firm Scottish Equity Partners, is expecting to win big on travel booking website Skyscanner in the near future.
Scottish Equity Partners backed Skyscanner with £2.5 million in 2007 for a 40% stake in the Edinburgh-based company. At the time, the company’s annual revenues were less than £1 million, according to Paterson. Today they’re around £100 million.
The Sunday Times reports that Scottish Equity Partners will sell off 5% of its stake in exchange for a huge profit as part of a new £65 million funding round that would value the company at over $1 billion (£660 million). Skyscanner is reported to be working with advisers Goldman Sachs and Numis Securities on the sale of new shares.
“We have a lot of emerging companies that are doing extremely well but the one that has had the most impressive performance to date has been Skyscanner,” Paterson told Business Insider in London last week. “That business is doing north of 10 billion [pounds] of ticket sales for flights. It’s over 700 employees. It’s making tens of millions [of pounds] of profit. It’s a very viable business. What’s interesting is even at the scale it’s at now, the growth rate is accelerating.
“In terms of great hopes, Skyscanner’s one that’s certainly been impressive from a return on capital. There’s many unicorns out there that have raised hundreds of millions [of pounds] but this hasn’t,” said Paterson. “Many are losing money substantially, this isn’t. It’s current valuation is largely based on profits. I think the aim now is an IPO [initial public offering] in 2017. That’s what the company is planning for.”
Silicon Valley venture capital giant Sequoia — a firm that has backed Google, Apple, and Facebook — has also invested in Skyscanner. The firm invested an undisclosed amount in 2013 at a $800 million (£529 million) valuation in 2013. Sequoia chairman Sir Michael Moritz sits on the board.
“We’ve invested in search related businesses in America for a long time and we’ve invested in travel businesses so it was fairly natural that Skyscanner hit our radar screen a few years ago,” Moritz told Business Insider at the opening of Skyscanner’s new London office last month, where he praised the company’s operations in China, a region is he particularly bullish about.
At the time, former Amazon exec Bryan Dove, now head of Skyscanner’s new London engineering hub and SVP of engineering at Skyscanner, said: “If you look at the metrics, Skyscanner has been consistently growing from a revenue perspective and an EBITA [earnings before interest, taxes, and amortisation]. I know there are some rumours out there, we certainly don’t comment on rumours. From a company perspective, we continue to be focused on our users and our products.”
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