If you were out of the office at the end of December – and many of Avinode’s employees were – you may have missed the sale of Avinode to billing and payment company Multi Service Technology Solutions. It was one of the most significant business aviation transactions of 2014.
The price has not been disclosed but Multi Service is owned by World Fuel Services so Avinode will have cash to invest in new products and upgrades. Niklas Berg, co-founder and CEO of Avinode, says the founders will stay at the company and continue to own a significant number of shares. “We have not sold because we want to go to the beach,” says Berg. “We love what we do and will continue to stay doing it.”
“We have not sold because we want to go to the beach. We love what we do and will continue to stay doing it.”
Lots of companies have set out trying to revolutionise business jet charter market: Avinode is one of the few that has succeeded. Although some operators and brokers may miss the old way of calling round for charter quotes, Avinode has made the market far more efficient and has plans to keep changing it.
The sale is also good news for other business aviation technology companies. Online consumer sites like Jetsmarter, PrivateFly, Stratajet and Victor are looking to raise private equity this year and will benefit from Avinode’s sale. They are increasingly challenging traditional brokers.
The other thing that is attracting some investors to business aviation charter is the success of Uber. Uber has taken on the traditional taxi market in more than 200 cities across the world and is now valued at $25 billion. Investors who missed out on taxis are looking for new industries. While it is hard to see how an Uber clone for private jet charter market could work (unlike taxis there are no easy monopolies that can be challenged and the regulations in business aviation are much stricter), technology companies will continue to change this relatively old fashioned charter industry.