HOWZAT Partners: In search of the next Trivago

Finding a promising young start-up in the highly competitive digital market needs skill and tenacity. GrowthBusiness meets HOWZAT Partners and the firm's co-founder David Soskin to find out how the investor found, and then sold, Trivago.

Not content with picking a name which might have used the founders’ names or a ‘clever’ variation on the word growth, HOWZAT Partners went for something much more interesting.

The ‘HOWZAT’ in the venture capital firm’s name is derived from the world of cricket, the sport’s equivalent of a eureka moment when everything comes together.

Set up by an experienced team of digital entrepreneurs and business builders, the firm is very specific in the kind of companies it likes to back – and its pursuit of that HOWZAT moment.

Having starting investing back in 2006, the team achieved its biggest exit to date at the turn of the year when it sold travel metasearch business Trivago to American giant Expedia.

The €477 million deal, for a 61.6 per cent stake, netted HOWZAT Partners a healthy return and was enough for it to pick up Exit of the Year at the Investor AllStars 2013 awards. After all, how often does a European internet business achieve a valuation of $1billion.

Trivago is a great example of the kind of business and management team which HOWZAT likes to back, founding partner David Soskin says.

‘We like to invest in things we understand and have experience in, those which have a clear path to monetisation and can scale extremely quickly,’ he says.

‘We prefer entrepreneurs who have already done an angel round, re-mortgaged their house, got money from a second cousin – skin in the game really.’

HOWZAT’s first involvement with Trivago came back in 2006, after five emails trying to get an introduction.

Soskin says that the investors had looked long and hard at competitor TripAdvisor – a very profitable, fast-growing business with an easy track to monetisation. 

‘However, we felt that the TripAdvisor model left a lot to be desired as it was very difficult to navigate around,’ Soskin adds.

‘We saw an opportunity for a brand new website, which was well designed and very easy to use for consumers – and also had a bit of a community around it.’

Enter Trivago. The German-based business had already built up a small but committed community of users.

‘This is very relevant in the world of travel as it is a very emotional market. It’s not like buying a fridge or washing machine,’ Soskin reveals.

With HOWZAT Partners on board as early-stage investors, the priority was to create a product which ‘constantly delighted’ its users, Soskin says. With users of digital businesses notoriously fickle, and one click away from using a rival’s platform, Trivago was successful in building a site which was very well liked.

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In my conversation with Soskin about the firm’s approach and investment hit list, he frequently comes back to the importance of management teams.

‘The most important criteria for us is whether we warm to an entrepreneur or founding team and whether we think they have the ability to be winners,’ he reveals.

‘That is a very intangible set of criteria as it has nothing to do with CVs or qualifications, it’s a matter of judgement based on our experience in the digital world.’

And experience is something that the team has in abundance. Soskin himself served as CEO of CheapFlights until 2008 after setting up Asquith Court Schools Group in 1989 before exiting it to West Private Equity. Fellow partner Hugo Burge was part of the investor group which bought the CheapFlights business from its founder, John Hatt, in 2000 and has dabbled in property investment. Sascha Hausmann, the last piece of the three-man founding team, was CEO at WorldRes and is a well-recognised individual in the online travel industry.

At Trivago, is was an entrepreneurial team which successfully married expertise in product building, technology and commercial acumen that was the biggest draw. Two of the three founding partners had also spent time at large internet businesses, learning how to be part of a fast-growing business.

>Having been through a number of boom and bust periods during his career, Soskin is well versed in deciding what kind of people will ultimately make a business a success.

‘HOWZAT Partners pairs with entrepreneurs who have built something already and can show us a bit of that horrible buzz word – traction,’ he says.

The exit that ultimately saw HOWZAT Partners scoop Exit of the Year was an opportunistic one in the sense that it was not something which was actively sought out. 

‘We would have liked to have stayed in as it has enormous future growth potential, but there was a lot of consolidation going on in the market.

‘Expedia had spun out TripAdvisor onto the public market and then needed something to compete with it.’

With fellow rival company Priceline acquiring Kayak, the flurry of corporate activity put Trivago right in the mix and provided an appetising opportunity for Expedia.

Looking at the UK and European technology market, Soskin believes that the quality of entrepreneurs has significantly improved over the last few years. With blue chip corporations and banks no longer sucking up most of the talent pool, many more are now looking to start-ups and business creation as a viable career path, he says.

With four of its eight investments successfully exited, HOWZAT Partners is proving adept at finding, investing in and growing promising digital companies. Going forward, the swath of exciting start-ups cropping up in the space should provide endless opportunities.

Hunter Ruthven

Hunter Ruthven

Hunter was the Editor for from 2012 to 2014, before moving on to Caspian Media Ltd to be Editor of Real Business.

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