How Scottish technology firms are maximising global opportunities

Garaeth Williams, CEO of SkyScanner Picture: VisMedia
Garaeth Williams, CEO of SkyScanner Picture: VisMedia
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The rapid growth of travel search firm Skyscanner from less than 30 employees seven years ago to more than 750 worldwide today generating huge revenues, underlines the extraordinary value that a technology company can create by executing successful globalisation.

It is no mean feat to match Skyscanner’s growth which involved new bases in Barcelona, Budapest, Sofia, Miami, Singapore, Shenzhen and Beijing. It now has 80 per cent of sales outwith the UK and serves as a great (but not isolated) example of a company that has maximised global opportunities from Scotland.

Calum Paterson, Managing Partner, Scottish Equity Partners.

Calum Paterson, Managing Partner, Scottish Equity Partners.

Scottish Equity Partners (SEP), an investor in Skyscanner since 2007 and its largest shareholder, has supported its expansion through acquisition, joint venture and organic growth. The global push is continuing with strong growth coming from Asia-Pacific underpinned by a joint venture with Yahoo! JAPAN and its Chinese acquisition Youbibi.

Calum Paterson, Managing Partner at SEP and a non-executive director of Skyscanner says: “When we invested in Skyscanner the rationale was to help it internationalise. It has done this incredibly well, thanks to a combination of great technology, great strategy and great execution. It has enormous potential for further growth.”

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There is no surefire globalisation blueprint - different approaches work for different businesses. For some, such as Mister Spex, an online eyewear retailer, acquisition can build market share fast. It obtained funding from SEP to fund a series of acquisitions that have rapidly transformed it from a German firm to a European leader.

The challenge facing CEOs is to make sound choices on critical issues including: prioritising markets; which functions to base overseas; the best talent pool and cost base; whether to buy or build an operation; and the legislative environment. For Skyscanner, targeting Europe first, helped avoid a head-to-head battle with larger US rivals in its early days and enabled it to steal a march in key geographies although for some companies, the US or Far East may be priorities.

Andrew Davison, a Partner at SEP, says size and scalability of a company’s domestic market can dictate the speed at which it moves into other markets. In any case, companies supported by investment partners with international experience are better equipped to seize opportunities and to mitigate risk.

Davison says a successful international partnership can even lead to a takeover offer. “Establishing a constructive commercial relationship that puts you on the radar of a potential acquirer without putting out a ’for sale’ flag can be a good approach.”

A key advantage for e-commerce firms is they may not require investment in physical infrastructure to internationalise. However, they do need a robust IT infrastructure to support growing sales, an effective marketing strategy. and potentially a customer support team if they operate across time zones.

Davison is a non-executive director of, a luxury fashion retailer which secured funding from SEP to upgrade its technology platform to support e-commerce growth and manage stock control and order fulfilment. The company, which began with four London shops, now has 85% of sales online, shipping worldwide from a UK warehouse. SEP helped attract Ulric Jerome as new CEO, bringing on board his experience of taking online retailer PIXmania into 20 countries.

Having the right executive team to lead global expansion is vital. One of the founding team may fulfil the role but recruiting people with local knowledge and experience can be highly beneficial, says Jan Rutherford, a Partner at SEP with a focus on healthcare companies.

An investment partner with a strong international network can help with C-suite recruitment as well as finding partners and premises, adds Rutherford. “When Skyscanner was expanding into Russia we all pooled contacts with experience of working there and we did the same for our healthcare companies moving into the US. Internationalising your board before you internationalise the company can significantly accelerate growth in priority markets,” she adds.

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Healthcare company Abcodia benefited from SEP’s experience of helping UK companies move into the US. Prior to launching its ROCA® ovarian cancer screening test in key US states, Abcodia appointed a new non-executive director with significant experience of building medical diagnostics companies in the United States and he helped recruit a US Vice President whose network has been invaluable in establishing the US commercial operation.

Rutherford says it is also important to reduce administrative and cost burdens for companies moving into new markets and to advise on corporate structure, tax and banking. “One of our companies struggled to find a suitable banking partner that would service their needs on both sides the Atlantic so we introduced them to Silicon Valley Bank who are experienced in managing international banking for venture-backed technology companies.”

The key lesson for technology companies looking to internationalise from a Scottish base is that access to the right contacts can open the door to exponential growth.

Scottish Equity Partners (SEP) is a leading UK venture capital firm recently named ‘Venture Capital Firm of the Year’ at the Unquote British Private Equity Awards 2015.

SEP is a sponsor of EIE Invest 2016 an investor showcase of 60 Scottish technology companies from the Life Sciences, Energy and ICT sectors that takes place on May 12 in Edinburgh.

This article was written in partnership with SEP and Informatics Venture.