UK venture capital firm Scottish Equity Partners (SEP) is considering selling a 10% stake in online flight comparison provider Skyscanner at an enterprise valuation of £1bn (€1.35bn,$1.52bn). Edinburgh-based local authority pension fund manager Baillie Gifford, that invested last month in the German online food delivery startup HelloFresh at a valuation of nearly £2bn, is rumoured to be among potential bidders.
Since a significant portion of Skyscanner's growth is from Singapore and China, Asian investors such as Singapore's £100bn sovereign wealth fund Temasek, which set up a London office last year, and Japanese mobile-operator-turned-global-technology-investor Softbank too could be interested.
While the bids for the stake in Skyscanner are expected this week, SEP may not sell to another private equity investor and would most likely sell to a sovereign wealth fund or pension fund as the shares that are being offered do not meet the type of preferential treatment that PE firms usually look for such as the right to sell first in a stock market flotation.
SEP which invested £2.5m in Skyscanner in 2008 would earn a strong return on investment if the sale goes through. SEP which currently has a stake of about 61% would continue to remain a majority stakeholder even after the sale opening up possibilities of higher profits if Skyscanner plans a stock market listing or becomes a takeover target for a larger online travel service, according to The Telegraph.
If the deal, for which Goldman Sachs has been mandated, is clinched at £1bn valuation, Skyscanner would be considered a "unicorn", meaning a startup that gets a valuation of $1bn before a stock market listing. It would also mean that the startup is now worth almost double of what it was when American venture capital firm Sequoia invested two years ago.
Skyscanner, that makes most of its money from airline referral, reported revenues of £88.6m for 2014, a 37% increase from the previous year. However, the pre-tax profit was down from £22m to £12.6m in 2014, which the company attributed to product development and increased headcount. The startup had an employee base of 583 around the world, according to its 2014 accounts filed at Companies House.