Sykes Holiday Cottages has secured fresh investment from private equity firm Vitruvian Partners to fund the fast-growing firm’s plans for further UK and international expansion.
The transaction sees Vitruvian invest an undisclosed sum for a majority stake in Sykes, replacing existing backers Livingbridge following their five-year partnership with the company.
At the time of Livingbridge’s investment in January 2015, Sykes managed 5,000 properties in the UK and Ireland and generated GBP17 million revenue. The business today manages over 17,500 properties, having delivered market leading organic growth and completed 12 acquisitions underpinned by a highly effective digital transformation strategy.
Sykes enjoyed a record year in 2019 with bookings up 26 per cent year-on-year, taking 1.6m people on holiday. The business saw profits (EBITDA*) during the year to the end of September 2019 rise to over GBP20 million (GBP12.6 million 2018) on the back of sales of GBP68 million (2018: GBP52.1 million).
In April, Sykes took its first step into the international market by acquiring a majority stake in Bachcare, which is the leading holiday rental firm in New Zealand with over 2,000 properties.
Vitruvian Partners has a strong history in travel businesses, backing Travel Counsellors, Skyscanner, and JacTravel, as well as listed technology company Just Eat.
The new partnership will help Sykes continue its investment in technology and people, as it targets serving more than 3.5 million holidaymakers annually by 2023 and growing its workforce to more than 1,000 people.
Graham Donoghue, chief executive of Sykes Holiday Cottages, says: “We’re excited about this next phase in the Sykes story. We’ve transformed the business within the last five years with the unwavering support from the Livingbridge team, and we are now in a strong position to scale further in what is a booming staycation market.
“Vitruvian are an excellent cultural fit for our business and bring with them a history of successful investments in technology and travel businesses around the world.
“Investing in our people, our service and technology platform will help us attract more holidaymakers and property owners, as well as helping us to continue our acquisition plans both in the UK and overseas.”
Ben Johnson, Partner at Vitruvian Partners, says: “Sykes Holiday Cottages has gone from strength to strength, growing from a trusted family-run business to one of the largest holiday home rental platforms in Europe. In Sykes we have found a team with a mission to become a global category leader and we hope to support that with our experience and capital. We back exceptional high-growth technology-enabled businesses with proven leadership teams and are excited to partner with Sykes Holiday Cottages during its next phase of growth.”
Adam Holloway, Partner at Livingbridge, says: “Sykes Holiday Cottages is a fantastic business and we are delighted to have supported its development and growth. In Sykes we saw a wonderful opportunity to transform a business by maximising its digital potential in a fast-changing consumer landscape. Sykes has succeeded in driving the use of digital technology to deliver outstanding service to property owners and customers. Sykes ranks favourably against any holiday home rental business we have seen globally, and it’s great to have a UK based market leader with a rapidly growing and highly skilled workforce.”
