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VARJO: PHOTOGRAPH BY AAPO HUHTA FOR BLOOMBERG BUSINESSWEEKBloomberg Businessweek August 20, 2018world, generating annual revenue of more than €7 billion
($7.94 billion). If the 17,000-employee company were inde-
pendent, its market value would likely be north of $50 bil-
lion. But since 2005, its proits have ultimately lowed to
Connecticut, the home of Priceline.com. The online travel
company, best remembered for its cheesy William Shatner
ads, bought Booking for $113 million in its early years.
Today, that deal is a veritable case study in smart deal-
making: Booking generates an estimated 80 percent of
Priceline’s $11 billion in annual revenue. Earlier this year, the
parent company even changed its name to Booking Holdings
Inc., belatedly acknowledging which brand really matters.
Gillian Tans, who runs Booking.com (but not the parent
company) and has been there for 16 years, says Booking
sold to Priceline because it was desperate for money to
keep growing. “Maybe if at that time there would have been
more funding available, Booking would have made difer-
ent choices,” she says.
When Booking sold, lack of venture capital was the top
complaint among Europe’s startup founders. Things have
changed. Last year, 3,500 European companies received
a combined $19 billion in venture investment. Although
that pales next to China’s $40 billion and America’s $67 bil-
lion, it’s a record for Europe and four times greater than
the igure from ive years ago. Still, pressure to cash out,instead of betting on the business, has remained a problem.
Take Finnish mobile-gaming heavyweight Supercell Oy,
one of Europe’s last great hopes before Spotify AB came
along. With a staf of just 250, two-thirds in Helsinki, Supercell
is among the world’s most proitable companies on a per-
employee basis, collecting €5 million a day from its 100 mil-
lion users even in the sixth year of Clash of Clans, its most
popular title. Yet the company’s soaring value now boosts
the bottom line in Shenzhen, China: In 2016, three years after
Supercell sold a majority stake to conglomerate SoftBank
Group and game developer GungHo Online Entertainment
for $1.5 billion, the Japanese companies lipped it to Tencent
in a deal that valued Supercell at $10.2 billion.
During a walk through Supercell’s shoe-lined corridors—
Finns typically pad around indoors in socks, slippers, or
woolen booties—Ilkka Paananen, the CEO and co-founder,
says he felt a responsibility to pay out venture investors
sooner rather than later. Selling to SoftBank delivered
them a return while still guaranteeing the company’s oper-
ational independence, he says. Like SoftBank, Tencent
Holdings Ltd. has vowed not to interfere with his creative
decision-making. A sale seemed preferable to the quarterly
targets or merchandising pressure that tend to come with
going public, he adds. “We want to be a games company
irst and foremost.”Varjo Revolut