Skyscanner valued at £500m in new deal

Picture: Contributed
Picture: Contributed
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One of Silicon Valley’s most highly- rated venture capital firms has invested an estimated £50 million to £100m to acquire a stake in one of Scotland’s fastest-growing technology companies.

Edinburgh-based flight comparison search engine Skyscanner’s deal with Sequoia Capital values the Scottish firm at about £500m and represents a massive return for its original shareholders.

It is thought the US company has bought between 10 and 20 per cent of the equity from existing investors. Scottish Equity Partners (SEP) has seen the value of its £2.5m investment in 2007 rocket to about £200m based on its 40 per cent shareholding. It is thought the Glasgow-based firm has not sold any of its stake.

Gareth Williams, Skyscanner’s chief executive, has a 16 per cent holding worth £80m. It is not known if he was among the sellers.

No money will be invested in Skyscanner, but the deal represents one of the biggest that Sequoia Capital, based in San Francisco, has led and is one of only three it has done in Europe.

Its chairman, Sir Michael Moritz, a former director of Yahoo and Google in their earlier years, joins Skyscanner’s board. He described Skyscanner as “one of the best technology companies ever to come out of Europe”.

Skyscanner, based in Edinburgh’s Quartermile development, is in the process of doubling its workforce to 500 and has opened an office in Glasgow.

Its mobile app has been downloaded more than 25 million times and its website attracts a similar number of unique users a month. It has opened an office in Miami as a base for a push into the US, Canadian and Latin American markets. The firm is already showing triple-digit growth elsewhere.

Williams said: “Sequoia Capital’s investment in Skyscanner brings us a depth of experience drawn from a pantheon of tech brands.”

The investment is regarded as a significant vote of confidence in the Scottish firm which was founded in 2003. Sequoia-backed companies are collectively worth 20 per cent of the total value of the Nasdaq stock exchange in the US.

Describing themselves as the “entrepreneurs behind the entrepreneurs”, the Sequoia team has worked closely with the likes of Steve Jobs of Apple, Larry Ellison of Oracle and Sergey Brin and Larry Page of Google.

Moritz said: “Skyscanner is one of the best technology companies ever to come out of Europe and is already a leading global player. Our job is to help take its current success a step further. Founders and CEOs like Skyscanner’s Gareth Williams are part of an extremely rare species with talents that most of us yearn for but don’t possess.”

Calum Paterson, managing partner of SEP and a director at Skyscanner, said: “We have worked closely with Skyscanner since we first invested almost six years ago. During that time it has achieved exponential growth and been transformed into a world class company.”

The latest investment follows Skyscanner’s acquisition of Fogg, a Barcelona-based company that makes internet hotel search simpler and faster. The acquisition, revealed in The Scotsman, was a significant step in the company’s expansion into other key areas of consumers’ travel plans.