Expedia Group Sells SilverRail Back to the Rail Aggregator’s Management

Top executives of the UK-based aggregator of rail trips, SilverRail, owned by Expedia Group, took the company private earlier this month in a management buyout.

Expedia retains an interest in SilverRail, which will operate as an independent privately held company, SilverRail stated Monday. The management buyout quietly took place October 2, but was not material to Expedia’s financials. SilverRail had been part of Expedia since 2017.

SilverRail will continue to supply Expedia Group’s business travel unit Egencia with rail options globally.

“We have evolved and matured greatly within the Expedia Group family of brands,” said Aaron Gowell, founder and CEO of SilverRail in a prepared statement. “We have also grown into a business largely focused on our rail carrier partners, building products for their direct retail needs as well as third party distribution. We are excited about the growth of rail as a sustainable travel choice and looking forward to building on our success in this sector.”

In a Skift interview after the announcement Monday evening UK time, Gowell said he’d been angling for a management buyout for a long time, and that he was “very happy” with going private again.

Gowell said SilverRail’s revenue in September had recovered to 70 percent of pre-Covid levels, and was cash-flow positive.

The Writing Was on the Wall

Expedia Group began partnering with SilverRail in 2010, expanded the relationship in 2016, and bought a 70 percent stake in the rail aggregator in 2017 for about $148 million.

Expedia officials, including then-CEO Dara Khosrowshahi, expressed a grand vision at the time about the role of rail in the future of a greener travel.

“Our primary goal in investing in the online rail revolution is to bring rail supply online, creating an even more diverse and robust product portfolio for our travelers around the world,” Khosrowshahi said when the deal closed in June 2017. “SilverRail has been a strong partner of ours for years and we look forward to achieving this goal together.”

But Khosrowshahi bolted for Uber two months later, his successor at Expedia, Mark Okerstrom, never made rail a priority, and current CEO Peter Kern, who succeeded Okerstrom six months ago, has been trying to simplify the company and discontinue brands that aren’t a core focus.

Gowell said Monday that SilverRail, which competes with Trainline in the UK, currently has about 40 percent market share in the UK, and has been increasingly been providing business services to rail suppliers, meaning the rail lines themselves.

For example, Gowell pointed to a recent beta with Rail Delivery Group, or RDG, a British rail group membership body, which implemented a SilverRail caching solution that reduced query loads some 50 percent for cost-efficiencies and a better user experience.

Founded in 2009, SilverRail had attracted some $70 million in funding before Expedia Group acquired it.

In 2017, Expedia bought out then-SilverRail majority investors Mithril Capital Management and Canaan Partners.

In the October 2 transaction, however, SilverRail’s management, including Gowell, co-founder and consultant William Phillipson, Chief Commercial Officer Cameron Jones, and Chief People Officer Caroline Thompson, took control of the company.