Sequoia Capital Invests Big in Skyscanner and Values It At $800 Million
Sequoia Capital just invested in Skyscanner, valuing as an $800 million company. / Skyscanner
Sequoia Capital’s investment in Skyscanner is the latest huge endorsement of travel metasearch. But could a pivot toward hotels and a possible rebranding that goes beyond airfares be in Skyscanner’s future?
Metasearch is the fastest-growing sector and it just got a little hotter as venture fund Sequoia Capital invested in Scotland-based Skyscanner, and valued the company at $800 million, according to the Wall Street Journal.
The story says it was one of Sequoia’s largest ever equity investments — though no amount was disclosed — which means it’s likely touching $100 million or more. The $800 million valuation is a lot smaller than the $1.8 billion that Priceline paid to acquire Kayak, but is a large valuation nonetheless.
Skyscanner has a huge global presence, fielding nearly 40 country sites in 30 languages, but although it offers flights, hotels, and cars, its focus is on flights, which is less attractive to investors than hotels.
Still, last month Skyscanner acquired Spain-based Fogg, a hotel metasearch site, in a possible tip-off that it is serious about making a real pivot into hotels.
Now with the addition of hotels in its arsenal, Skyscanner is going to compete more directly with Kayak, especially stateside where Skyscanner says it is expanding. Though, of course, with revenue of around $50 million and pre-tax profits of about $18 million over the last year, it is tiny compared to the almost $300 million in revenue Kayak generated in 2012. The Wall Street Journal story pegs Skyscanner’s 2012 gross bookings at $3.5 billion.
Sequoia does know a thing to do about travel metasearch: It had a roughly 16% stake in Kayak, worth about $251 million, around the time that Priceline announced it would acquire Kayak.
Founded a decade ago, Skyscanner — before the Sequoia investment — had a Series A round of $5.21 million, which was led by Scottish Equity Partners in 2007.
The Wall Street Journal doesn’t specify how much Sequoia invested.
The investment, though, clearly shows that the travel metasearch landscape is ripe for maneuvering following Priceline’s acquisition of Kayak, and Expedia’s taking a controlling stake in Trivago, and leading a Series C round in Room77. This is also Sequoia’s largest investment to date.
Skyscanner launched its first app fairly late — two years ago — and currently offers apps for iOS, Android, Windows Phone, Windows 8, and Blackberry. It also claims 25 million mobile app installs.