Skyscanner just raised £128 million and became one of the most valuable startups in Britain
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The 14-year-old company - based in Edinburgh, a fast emerging tech hub that is also home to fantasy sports giant FanDuel - has been slow to raise money, relying instead on its own self-generated revenues, thought to be around £100 million per year.
Prior to today, Skyscanner had taken a small amount of venture funding (less than £5 million) from Scottish Equity Partners (SEP) and Silicon Valley heavyweight, Sequoia, which backed many of the world's biggest technology companies in their early days, including Apple and Google.
Today Skyscanner employs between 700 and 800 people, is available in 30 languages, and has offices around the world. But if the company wants to carry on growing and fend off competition from the likes of Kayak, Expedia, and Google then it's likely that it will need more capital at its disposal.
Gareth Williams, Skyscanner CEO and cofounder, said in a statmement: "Skyscanner has enjoyed high double-digit growth rates for some years now, and has been profitable since 2009.
"This success is thanks to our 1,200 direct partner relationships, the trust of the 50 million travellers who use us every month, our technology and the dedication of our teams to deliver the best experience for travellers possible. This financing round and our recent new hires allow us to build fantastic further tools for travellers.
"I'd like to thank SEP and Sequoia for their belief in us and also welcome our new investors to the team. We have so much more to do together - it's an exciting time."
Skyscanner received the funding from an eclectic cohort of new investors. The five new backers include:
- Artemis: a global fund manager that manages more than £22 billion ($33 billion) across a range of funds.
- Baillie Gifford: an independent investment manager based in Edinburgh, investing globally on behalf of its clients.
- Khazanah Nasional Berhad: the strategic investment fund of the Government of Malaysia, which has access to markets across the Asia Pacific region.
- Vitruvian Partners: a European investor with a track record of backing fast-growing businesses with deep expertise in online marketplaces.
- Yahoo! Japan: a venture partner in Skyscanner Japan already. Its investment further strengthens this relationship.
Business Insider met with Skyscanner, Sequoia, and Scottish Equity Partners at the end of last year when Skyscanner opened an office at WeWork coworking space in London's Moorgate. However, none of the parties gave too much away, despite our probing.
Scottish Equity Partners investor Stuart Paterson said: "I think the aim now is an IPO [initial public offering] in 2017. That's what the company is planning for."
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."
Sequoia chairman Sir Michael Moritz said: "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." He added that he respects the fact it is one of the few western tech companies to expand to China.
Beyond China (Shenzhen), Skyscanner also has offices in Barcelona, Beijing, Budapest, Edinburgh, Glasgow, Miami, Singapore, and Sofia.
Skyscanner, founded in 2003 by Williams, Bonamy Grimes and Barry Smith, was advised throughout the investment process by Goldman Sachs and Numis Securities, who acted jointly as financial advisers, brokers and bookrunners in connection with the investment.
The UK has produced 17 other billion dollar startups, or 'unicorns,' in the last few years, compared to more than 140 worldwide, according to research from investment bank GP Bullhound.
Other UK unicorns include the likes of restaurant food delivery service Deliveroo and money transfer service TransferWise.