Investor Group Makes Play For Skype

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A group of well known venture capital and large private equity firms are pooling resources to make a bid to acquire eBay-owned Skype, according to a source close to the deal.

Investors in the proposed purchase may include newly-formed Andreesen Horowitz, Index Ventures (who were early investors in Skype before the ebay acquisition), and one or more multi-billion dollar private equity firms.

eBay, which announced earlier this year that they would be spinning off the company in an initial public offering in 2010, is said to be looking for $2 billion or more for Skype. Companies quite often talk about IPOs (and even actually file) to generate acquisition buzz.

The Andreeseen Horowitz fund can make single commitments of up to $50 million, so it’s clear a large private equity fund (or two) would need to be involved in the deal as well.

It isn’t clear if current Skype CEO Josh Silverman would continue to lead the company after any acquisition. Sources we’ve spoken with have said he is generally well thought of both within Skype/eBay as well as the possible investors.

Skype, under Silverman, grew revenue to $551 million last year, and eBay has said it expects the company to top $1 billion in revenue in 2011.

Presumably, the investor group, if successful in acquiring Skype, would run it privately and eventually prepare it for an initial public offering.

Skype founders Niklas Zennstrom and Janus Friis, were also reportedly in talks with several private equity firms earlier this year to make a bid for the company.

Recent news that Skype is now in litigation with a company controlled by those founders over key Skype technology only complicates the picture further.

eBay acquired Skype in 2005 for $4.1 billion, although about $1 billion of that, an earnout, was never paid.

Update: Confirmation of the deal.

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