Domain Manage

£200 Million for website

Discussion in 'General Board' started by domaingenius, May 21, 2006.

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  1. domaingenius

    domaingenius Well-Known Member

    Dec 2004
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    THE recent bout of internet companies being sold for high prices has prompted to seek a sale or flotation, in a move that could value the travel business at up to £200m.

    Founded in 1996, Cheapflights is one of Britain’s longest-established and consistently profitable internet businesses. The website allows users to compare the cost of flights, and earns money from “pay-per-click” referrals to airlines and other travel firms.

    Since last December, renewed enthusiasm for online firms has encouraged a spate of expensively priced transactions.

    ITV paid an initial £120m for Friends Reunited, or about 10 times the firm’s 2005 revenues; Rightmove, the online property business, floated at a valuation of £425m; and Uswitch, the utility price-comparison site, was sold for £210m. Sir Richard Branson’s is considering a £200m flotation.

    David Soskin, Cheapflights’ chief executive, said: “We are the only British internet company with a successful business in North America, the home of the internet. We think we have huge global potential.”

    Soskin and his business partner Hugo Burge are keen to cash in some of the value they have created since buying into Cheapflights in 2000. Soskin would not give details but said that, between them, he and Burge owned a stake of more than 20%. Burge’s father, Oliver, also owns a large stake.

    The handful of other shareholders are angel investors and wealthy individuals. Soskin has refused to accept investment from venture-capital firms after a disappointing experience with his previous business, Asquith Court, a nursery-school company.

    Cheapflights attracts more than 5m users a month, and is growing rapidly in America, where it started up three years ago. It generated revenue of £12m in the year to the end of March, but is growing at 50% to 60% a year.

    Soskin said: “We see no reason why this financial year should be any different, and there’s a strong possibility that we could grow even stronger.”

    After Google, Cheapflights is the biggest referrer of business to and Ebookers, the travel websites.

    Soskin wants to raise additional funds to expand into continental Europe. It has hired Mike Bennett from recruitment site as the head of its American business, allowing Burge to return to Europe.

    Soskin said he had “an open mind” about whether to go for a flotation or a sale.
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    Acorn Domains Elite Member

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