Traveltek tipped for equity fundraising to create 200 jobs

Traveltek tipped for equity fundraising to create 200 jobs

Travel booking systems provider Traveltek is tipped to raise millions of pounds of equity to help fund plans to create 200 technology jobs.

Traveltek is also targeting a rise in annual turnover from £4.3 million to £25 million as part of a three-year expansion plan,

Company founder and majority shareholder, Kenny Picken (pictured), said the company was looking to raise a “few million pounds” of equity, signalling the possibility that this could come from an angel investor with expertise in the sector.

Traveltek said it would shortly start marketing itself to the venture capital, private equity, and angel investor communities.

The company currently employs 92 people, 62 of them in East Kilbride, Scotland.

Picken said that the majority of the 200 planned additional jobs would be in the UK, at sites in East Kilbride and Derbyshire.

Traveltek is planning to open another three offices, in the Brazilian city of Sao Paulo, in Shanghai in China, and in Dubai.

The company already has small offices in Miami and Sydney, which each employ three people. It also has a site in Hyderabad in India, where about 20 people are employed.

Picken, president and group managing director of Traveltek, told The Herald Scotland: “I think 200 is a relatively conservative estimate on the plans we have.”

He highlighted strong, double-digit-percentage annual growth in the cruise market over the last 10 years. He also underlined the rapid pace of growth in the travel sectors in China and the Middle East.

Traveltek’s customer base includes Hay’s Travel, Trailfinders, Co-operative Travel, Flight Centre, Emirates, Barrhead Travel, and Imagine Cruising.

Picken said: “We have a strong position as the booking systems supplier of choice for many of the major travel trade businesses. There is a significant opportunity to leverage that position and develop Traveltek into a major global technology business.

“Growth finance will enable us to accelerate that process, build a larger global footprint and create a large number of high-quality technology jobs, many of which will be in Scotland.”

He added: “The right partner will share our vision and the funding will help us invest in the latest technology, new infrastructure, business systems, business development and new talent.”

Asked how much funding Traveltek planned to raise, Picken said: “The actual figure, I think, is actually going to be determined by the appetite of the investor. It is certainly a few million pounds.”

Picken, who owns more than 65% of the firm at the moment with colleagues holding the remaining equity, indicated that he would like to retain a majority stake in the business.

He said: “I think I would like to retain the majority stake because I don’t have any plans other than to continue to grow the business.”

However, he added: “I think I am open to what is on the table. For me, personally, I am very, very excited about the prospect of being able to accelerate the growth of the business through equity.

“Over the past couple of years, that has become increasingly obvious for a business that has never borrowed money before and has had an objection to [doing] so. We have realised we have a fantastic opportunity. To stay ahead of the game, we need to accelerate as fast as we can. The only real way to do that is to get the investment in.”

Chris Horne, managing partner of Traveltek adviser and accountancy firm Campbell Dallas, cited his belief that the company could take a “quantum leap” in terms of expansion.

He said: “Traveltek has quietly grown into a significant Scottish technology business, is very profitable and is continuing to grow. Growth finance will enable the business to take a quantum leap forward with its ambitious expansion strategy.”

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