Who Invested How Much to Buy Skype

[qi:gigaom_icon_voip] Earlier this week, a group of investors led by Silverlake Partners, a Silicon Valley-based private equity group, acquired 65 percent ownership in Internet telephony company Skype for about $1.9 billion in cash and $125 million in debt. The current owner, eBay, retained 35 percent of Skype, which was valued at about $2.75 billion. Skype was acquired by eBay in late 2005 for roughly $3.1 billion, but the final price turned out to be $2.6 billion.

The San Jose, Calif.-based auction company took massive writedowns because of its botched Skype acquisition. The investor group, however, didn’t disclose each individual partner’s contribution to the Skype deal. I made a few phone calls and have come up with estimated amounts contributed by various parties.

  • Silverlake Partners: $1.48 billion.
  • Canada Pension Plan (CPP) Investment Board: $300 million.
  • Index Ventures Growth Fund: $70 million.
  • Andreessen Horowitz: $50 million or a sixth of Marc Andreessen’s new $300 million fund.

The buyers paid about $5 per registered Skype user. Skype has 400 million-plus users. These are clearly big numbers, but so is the investment. One industry expert I spoke to said that the deal is priced for perfection and for investors, everything needs to go well. Skype is currently fighting a legal battle with its founders, Niklas Zennstrom and Janus Friis, who have sued the company.

And in order for this deal to pay off for its investors, Skype needs to accelerate its already red-hot revenue stream. According to Peter Falvey of Revolution Partners, an investment bank, with Skype likely to do revenues of between $600 million and $650 million, the current deal values Skype at about 4.5 times revenues.

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