The government’s digital expert has backed the £1.4bn sale of Skyscanner to a Chinese company and argued the deal does not embarrass the chancellor’s efforts to maintain the independence of UK technology companies.

Eileen Burbidge, who chairs the government’s Tech City UK initiative, which fosters the development of tech companies, said the sale of Skyscanner demonstrated the quality of the British tech scene. She said the Edinburgh-based company had grown to a size where a sale was one of a number of options for it to keep expanding.

“It demonstrates how much talent there is in Britain that companies from China, the US or anywhere are looking to buy businesses here,” she said. “I don’t think Skyscanner is the kind of company the chancellor was referring to. It’s certainly not a start-up. It’s already very successfully scaled.”

In his autumn statement on Wednesday, Philip Hammond pledged to invest an extra £400m in venture capital funds to provide more finance for growing companies. Hammond said the funding, through the British Business Bank, was “a first step to tackle the longstanding problem of our fastest-growing technology firms being snapped up by bigger companies, rather than growing to scale”.

Yet, that night, it was announced Skyscanner, a flight-booking website, had been sold to Ctrip, a Chinese tourism group. The company is one of Britain’s so-called unicorn businesses – privately owned companies with valuations of $1bn (£800m) or more.

The sale raised fresh questions about foreign takeovers of British companies – particularly those that lead in technology – after the acquisition of ARM Holdings by SoftBank of Japan in August. It also raised doubts about British tech companies’ ability to emulate the success of Silicon Valley in the US, where the Snapchat app is preparing to float with a value of up to $25bn (£20bn).

Burbidge said a stock market listing was just one option open to privately owned tech companies and that a sale to a competitor, or bringing in more private investment, could supply further funding without the added scrutiny that comes with being a public company.

She said Skyscanner’s value and expertise would be recycled into the UK tech scene. Its biggest investor, Scottish Equity Partners, has come out with £465m from the £9m stake it bought in 2007. Skyscanner’s founders have backed Decidz, an app business based in Edinburgh, that lets people organise events together.

Burbidge said: “I would like to get to the point where British companies are buying their international counterparts but in the meantime it’s good that international companies are looking to the UK.”

Skyscanner started in 2001 when its co-founder, Gareth Williams, was working as a computer programmer and was frustrated when trying to compare flight prices for a skiing holiday. Now the business helps 60 million customers compare data on hotels, flights and car hire.



Williams, who is Skyscanner’s chief executive, said the company could have kept growing at a good pace but that joining up with Ctrip will transform its prospects and give it the backing to expand in China.

He said: “The support of Ctrip will allow Skyscanner significant expansion in our reach and product globally, as we’ll gain insights and product investments from them. Ctrip has a huge market share in China and aims to grow significantly in the rest of the world. We can help make this aim a reality.”

He said Ctrip agreed Skyscanner should operate independently under its existing management and keep its headquarters in Edinburgh.

Skyscanner has been rumoured to be considering a stock market flotation for several years, following other former unicorns such as Zoopla, the property website, and Sophos, the cyber-security company.