Ray Nolan, co-founder of WRI (Hostelworld) possibly to end up with over €100m in shares — an Internet success story:
He's the Irish software millionaire most of us had never heard of. Just nine years after he and his partner Tom Kennedy founded WRI, Ray Nolan will end up with shares worth up to €100m when the online accommodation booking company floats on the stock exchange.
A computer programmer by profession, Nolan, who will be 43 this year, was already a grizzled IT veteran when he and Kennedy founded WRI in 1999. Twelve years earlier he founded his first IT company, Raven Computing (whose name was later changed to Coretime), when he was just 22. Coretime produced bespoke software systems for the legal and hospitality sectors. It was while he was trying to sell Kennedy a software package for the Avalon hostel, which Kennedy then owned, that Nolan first met his future business partner.
Nolan eventually sold Coretime to Sage in 2004.
Despite the success of Coretime, Nolan had to adopt some innovative fund-raising techniques when he and Kennedy were seeking capital to set up WRI in 1999. They approached five hostel owners and in return for the promise of £20,000 in free online advertising they each stumped up £10,000.
Once WRI was up and running it attracted a number of other investors, including U2 manager Paul McGuinness and his business associate Trevor Bowen, former Baltimore Technologies executive Michael Butler and insolvency practitioner Michael Buckley.
This combination of the hostel owners' seed capital and the money provided by the early investors was enough to keep WRI growing rapidly up to the time of the hostelworld.com acquisition. Nolan agreed to purchase the website for $3.5m (€2.4m) just before Christmas 2002. The problem was that WRI didn't have $3.5m. However, Nolan was able to persuade the vendors to wait a few weeks while he raised the cash.
In May 2004, US venture capital company Summit Partners invested an estimated €30m for an undisclosed stake in WRI. The Summit investment gave WRI the firepower to maintain the rapid pace of expansion which has seen the company grow at a compound annual rate of 30pc for the past several years.
In 2006, the last year for which accounts are available, WRI recorded profits of €16.6m on a turnover of €27.3m. The pace of growth was maintained in 2007.
Full story at The Independent.
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