Founded by Gareth Williams 2003 to provide free flight search services, Skyscanner also added the ability to compare hotel and car hire prices. From its base in Edinburgh, Skyscanner raised over £130m during its history from investors including SEP, Sequoia Capital, Vitruvian Partners and Artemis.
NASDAQ-listed travel company Ctrip has now stepped in to buy Skyscanner, and will allow the current management team to continue to run the business independently.
SEP, which also counts Babbel, Sport Pursuit and SolarCentury as portfolio companies, first backed Skyscanner in 2007 and has invested a total of £9m during that time. While no comment is being made on individual returns, SEP told Real Business that the firm is the largest shareholder in the technology business with a one-third equity holding on a fully diluted basis.
Based on a £1.4bn deal valuation, SEP’s stake is worth just under £500m. With £9m invested from start to finish, that provides the venture capital firm with a near 50x return on investment.
Calum Paterson, managing partner of SEP and a member of Skyscanner’s board of directors, said: “We are pleased to have played our part in helping Skyscanner become one of the world’s most exciting travel search companies. Ctrip is the ideal partner to enable the company to extend its global reach, grow even more rapidly and continue to deliver a fantastic product that is greatly admired by travellers across the world.
“We are particularly pleased that Skyscanner will continue to be headquartered in Edinburgh and to operate independently. We wish the team every success in the future.”
Skyscanner reportedly ranks as one of the top online travel brands based on search interest, and generates 60m monthly active users across 30 languages.
Explaining why Skyscanner decided to be acquired by Ctrip, rather than an expected IPO on the London Stock Exchange (LSE), Williams said the two businesses shared a common view of organising travel.
To solve the problem of organisation travel, which he believes still has a long way to go, will require “powerful technology and a traveller-first approach”.
“In taking the next step to achieving our goal, Skyscanner will remain operationally independent and our growing global team will continue to innovate and deliver the products travellers know and love. It’s an exciting time for our business, our partners and the travellers who use us.”
The deal is still subject to what are described as “customary closing conditions”, but both parties except it to be close by the end of 2016.
James Jianzhang Liang, co-founder and executive chairman of Ctrip, said “Skyscanner is one of the largest travel search platforms in the world. We are excited to welcome Skyscanner into the Ctrip group. Ctrip and Skyscanner share the same passion and dedication in providing travellers around the world with better services. This acquisition will strengthen long-term growth drivers for both companies.”