Lowcostbeds.com has completed a substantial investment deal with the Close Venture Management, valuing the company at £7m within a year of set up.
Lowcostbeds.com, launched in November 2004, is ahead of its business
plan for its first year’s trading to sell over 30,000 holidays, with
turnover exceeding £4.5m and a forward run rate of £10m per annum.

Close Venture Management was a significant investor in activehotels.com
which was sold to US internet giant, priceline.com, for £90m in 2004,
making a 10 times return on its investment.  It is part of the Close
Brothers Group, a 125 year old merchant bank, voted “Venture Capital
Trust Manager of the Year” at the Growth Company Investor awards on 22
June 2005. This award is another endorsement for Close Venture
Management’s position as a leader in the VCT arena. Earlier in the year
CVM was voted “Best VCT Provider” in the Professional Adviser Awards
2005.

Paul Evans, who founded lowcostbeds.com in 2004 after a successful 20
year career growing market leading tour operators including Airtours and
First Choice, commented: “We are delighted to have completed this deal
with Close Venture Management. It will provide us with funds to further
exploit the massive growth in the independent, dynamically packaged
holiday market, and establish us as the leading independent company in
this sector. This investment completes our first phase of development
and positions us for profitable growth”.

Will Fraser-Allen, Director of Close Venture Management, who will join
the lowcostbeds.com board said:  “The on-line travel market is growing
at double digit rates, but is still only scratching the surface of the
potential. Lowcostbeds.com, with its unique product range and very
strong management team, is ideally positioned to take advantage of this
growth”

Lawrence Hunt also joins the board as a non executive, having played a
major role in the set up to date.  His experience gained from building
and successfully exiting five businesses in the travel and technology
industries will be invaluable.

Andrew Godber, a director of Panmure Gordon, a city broker involved in
the leisure sector, comments on the deal:  “This is an exciting
transaction for lowcostbeds.com and Close Venture Management as it will
help to accelerate further the growth of lowcostbeds.  Lowcostbeds has
an exceptional platform for addressing the rapidly expanding on-line
travel market, whilst Close is one of the most experienced investors in
the sector.”
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