May 23, 2017 / 4:12 PM / 2 months ago

Kiwi.com in talks to raise funds for next leg of travel

3 Min Read

PRAGUE (Reuters) - Czech online travel agency Kiwi.com is in talks with potential venture capital or strategic partners to help it reach top spot in the 1.3 trillion euro ($1.46 trillion) market.

Oliver Dlouhy, Kiwi.com's 29-year-old founder, said on Tuesday that it expects airline ticket sales to double to 700 million euros this year and grow faster in 2018 as it expands its database of global connections and adds ground transport.

What makes Kiwi.com different from competitors is what it calls "virtual interlining", or selling flight itineraries combining normally non-cooperating airlines. Kiwi.com provides guarantees covering missed connections.

Dlouhy said the firm, which was founded in 2012 and has so far raised around 1.5 million euros, was now valued at about 400 million, with revenue of some 100 million this year net of ticket costs and EBITDA of around 10-15 million.

"We are looking for an experienced venture capital fund and we are on the radar of an A-class fund from Silicon Valley," Dlouhy told the Reuters Central European Investment Summit in Prague, adding that it had outgrown the Czech startup market.

Dlouhy said Kiwi.com which was renamed from skypicker.com last year because it was unique and could be recognized in all languages, was now among the top five in online travel in Europe, competing with the likes of edreams.com or bravofly.com.

The idea for his business model came when he could not find an easy cheap connection for a holiday in Portugal, he said.

Kiwi.com's shareholders, private Czech investors and a venture firm, have said they are ready for an exit if conditions are right, Dlouhy said, adding that its would be more than double if priced at 9 to 12 times revenue, as last year's acquisition of Skyscanner by China's Ctrip.com was.

Kiwi.com's value is given a discount because it depends on large metasearch sites kayak.com, momondo.com and skyscanner.com for the majority of its volume, he said.

"If there is strategic partner who can to give us not just the money but more importantly the customers, the data, the technology that can get us to our goals faster, it could also be a good option," he added

A transaction may include raising 20-40 million euros in fresh capital, said Dlouhy, who aims to keep his 24.5 percent stake in the firm, which is now integrating more flight data that would help boost growth "exponentially" next year.

It also aims to direct more traffic directly through its site and will add other services, from local transport to hotels or entertainment, as it prepares for a full personalization of travel arrangements a few years down the road, Dlouhy said.

($1 = 0.8906 euros)

Additional reporting by Michael Kahn; editing by Alexander Smith

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