They’ve got their fingers in lots of pies, including a venture capital fund with over $1 billion at its disposal and an autonomous robot startup that’s delivering takeaways to people in the U.K. and California.
The so-called Skype Mafia is a sprawling beast involving dozens of people, but there are a few names that really stand out.
Founded in the early 2000s, Skype was bought by eBay in 2005 for $2.6 billion. The deal saw founders Niklas Zennström and Janus Friis pocket approximately $390 million each. At the time, it was not only the biggest exit in European tech, but also the largest tech exit globally since the dot-com crash.
The history around the deal makes for interesting reading. Zennström and Friis retained ownership of some of Skype’s technology, which proved vital when relations between eBay and Skype soured. The European entrepreneurs sued eBay for misusing their IP, leading Google and Microsoft to think twice about buying the company off eBay. They alleged that some of their code, which they retained the copyright for, was being used in Skype without their permission.
In 2009, eBay sold 70% of Skype for $2.75 billion to an investor group called Silver Lake that included some of Skype’s cofounders. EBay and Silver Lake then sold it onto Microsoft for $8.5 billion in 2011, with Silver Lake being the clear winner in the deal.
After speaking with multiple ex-Skype employees and people with close links to company, Forbes has identified ten of the most influential and successful people within the Skype mafia.
1. Niklas Zennström, Skype Cofounder and CEO
The series of acquisitions made a lot of Skype’s early employees millionaires, but ex-Skype CEO and cofounder Niklas Zennström netted the lion’s share.
Forbes estimated in 2015 that Zennström—who also cofounded peer-to-peer file-sharing service and Napster rival Kazaa—had a net worth of around $900 million.
A keen yachtsman, the 53-year-old Swedish entrepreneur used some of his Skype profits to build racing yachts that have won major races such as the Sydney to Hobart Yacht Race. He also reportedly sails for around 90 days a year.
Some of his Skype proceeds went into setting up his own venture capital fund, Atomico, in London’s Mayfair district. Just outside the Atomico office, Rolls Royces and Bentleys drop off wealthy shoppers on the doorsteps of swanky stores like Louis Vuitton and Belstaff.
Set up in 2006, Atomico is investing over $1.5 billion into early-stage technology startups across a range of industries. Zennström set it up because he wanted to build the VC he couldn’t find when he was raising for Skype in Europe. The fund has backed dozens of businesses, and big wins to date include Supercell (stake sold to SoftBank), Xobni (acquired by Yahoo) and Klarna, which is now valued at over $5 billion.
Tall and composed, Zennström is particularly keen to back sustainable businesses that have the potential to mitigate the impact of climate change. Atomico has backed a German startup called Lilium, for example, which is developing a small electric flying vehicle that could help to cut emissions and reduce congestion. And more recently the fund backed a digital agriculture firm that examines weather, soil and field data to help farmers determine potential yield-limiting factors.
2. Janus Friis, Skype Cofounder
Skype had several cofounders, but Friis, a 43-year-old from Denmark, is widely regarded as the main cofounder, alongside Zennström.
The duo have a long history and their entrepreneurial endeavours go way back: Friis cofounded Kazaa with Zennström, and prior to that they worked together at Tele2, a European telco. They also developed Joost—an application for distributing TV shows and other video content over the Web.
But reports have suggested their relationship isn’t quite what it used to be, with one source saying that the duo are no longer on speaking terms.
Today, Friis has his attention firmly on self-driving delivery robots. He cofounded a company called Starship Technologies with Ahti Heinla, another one of the Skype Mafia, and the company raised an additional $40 million from investors this week to help it expand to 100 universities.
But Starship’s cute little robots, which can take meals from restaurants to people’s homes and offices, have yet to properly take off. The business has been around for a few years now, but most people haven’t seen the company’s bots in the wild.
Starship says that its sci-fi machines have made 100,000 deliveries to date, but they tend to be in small towns like Milton Keynes or on private property, partly because there’s less chance of the robots being attacked by unruly youths.
The robotics company has now been backed with $85 million in total, and investors include Airbnb cofounder Nathan Blecharczyk and Jaan Tallinn, another member of the Skype Mafia.
3. Taavet Hinrikus, Skype’s first ever employee
Estonia’s Taavet Hinrikus joined Skype in 2003 as its first-ever employee, working in a variety of different roles that spanned everything from product to technology to business development. He remained at Skype for six years and defined Skype’s strategy for upcoming products.
Today, Hinrikus is the cofounder and chairman of currency exchange platform TransferWise. Hinrikus had the epiphany for TransferWise in 2011 when he was living in London but working for Skype in Estonia. He was paid in euros, but had a mortgage in pounds. Meanwhile, his TransferWise cofounder, Kristo Käärmann, worked in London, but had a mortgage to pay in Estonia in euros. Every month, Hinrikus put euros into Käärmann’s Estonia account and Käärmann put pounds into Hinrikus’ English account in order to avoid the hidden currency exchange fees imposed by the banks.
“I would say Taavet is by far the success story [from Skype],” says venture capitalist Mark Tluszcz, who profited off an early investment in Skype.
His London-based fintech startup has been backed by some of Silicon Valley’s best known venture capital firms, including Skype-backer Andreessen Horowitz and Valar Ventures, which was founded by billionaire Peter Thiel. TransferWise was most recently valued at $3.5 billion.
Hinrikus is now looking to back the next generation of European entrepreneurs. He’s made 25 investments into other technology startups, including European Uber rival Bolt in Estonia and London-based fintech app Curve, which is designed to be an all-in-one payment solution.
4. Eileen Burbidge, Skype’s Director of Product
Over the last few years, Eileen Burbidge has become one of the U.K.’s most well-known technology leaders, regularly gracing the screens of TVs and the business pages of the country’s newspapers.
Prior to joining Skype in London in 2004, she worked for some of the world’s biggest technology companies including Apple and Verizon.
While at Skype between April 2004 and April 2005, Burbidge was head of product development, reporting directly to Zennström. She says she was responsible for all of the company’s product road maps and strategic alliance/partner-integration efforts with companies like Packard Bell and Motorola.
Today, the mother of five is a venture capital partner at Passion Capital, one of the main investors in mobile banking app Monzo. Burbidge is also a nonexec director at Dixons Carphone, a fintech envoy for the U.K. Treasury and the chair of U.K. Government’s Tech Nation quango (an independent government committee).
“She has built the largest and most important fintech ecosystem in the world,” says Rodolfo Rosini, a partner at early stage tech investor Zeroth AI. “It’s the only European market where vis-a-vis we beat Silicon Valley hands down. Her fingerprints are all over the largest fintech companies, and that has been the case for the past ten years.”
5. Ahti Heinla, Skype Cofounder and Chief Technical Architect
Estonian programmer and developer Ahti Heinla was one of Skype’s cofounders and the company’s chief technical architect from December 2002 to August 2008.
In 2003, Heinla founded an investment firm called Ambient Sound Investments with three other ex-Skype engineers that allowed them to hold a minority stake in Skype. At the end of 2005, ASI sold its Skype shares to eBay and now operates as a family office type fund with around $111 million (€100 million) at its disposal.
In December 2007, Heinla founded an advertising tech startup, which is still around today. But since 2014, Heinla has been back with Skype cofounder Janus Friis, focused on rolling out Starship’s delivery robots around the world.
6. Jaan Tallinn, Skype Cofounder and Engineer
Another Estonian, Tallinn was also instrumental in setting up Kazaa and Skype. He too is part of the Ambient Sound Investments team, but he does not appear to have set up any other businesses post-Skype.
Tallinn is dedicating much of his time today towards studying the risk of new technologies including AI. He cofounded the forward-thinking Centre for the Study of Existential Risk at the University of Cambridge in 2012 and the Future of Life Institute at the University of Oxford in 2014.
While he hasn’t launched another company himself, he’s invested in many, and he’s likely to have made a tidy profit from his early investment into AI research lab DeepMind, which was acquired by Google in 2014 for around $600 million.
“Jaan went into AI way before most,” says Rosini, partner at early stage tech investor Zeroth AI. “I think they deployed a neural network on Skype when he was there, making it the largest deployment of a NN at the time, but machine learning was not hot so they told nobody.”
“Thanks to him there was a focus on AI before it became big in Silicon Valley. Lately he has been quiet and left the day-to-day operations of his VC firm.”
7. Saul Klein, Skype’s Chief Marketing Officer
Saul Klein, one of Skype’s later employees, is another very well-known figure in the European tech industry, and he’s had a prolific career since leaving Skype.
Known for his no-nonsense approach, Klein held a number of roles at Skype between July 2005 and October 2007 including VP of ecommerce and VP of global marketing.
One source told Forbes that “he arrived late and took more credit than he deserved,” but Klein’s success post-Skype can’t be disputed.
The South African-born businessman joined Index Ventures (a transatlantic venture capital firm that’s backed companies like Facebook and Deliveroo) in late 2006, and stayed with the company until June 2015. He then set up his own VC firm called LocalGlobe with his father Robin Klein.
Klein is also the cofounder of startup fund Seedcamp and startup networking group Opencoffee Club. At one point or another, he’s also had board seats at MindCandy, TweetDeck, LoveFilm and Last.fm.
But Klein’s not just influencing startup strategy. These days he’s also heavily involved in U.K. government strategy. In July 2017, Klein’s landed a seat on the advisory board of the U.K. government’s Department for Digital, Culture, Media and Sport (DCMS).
8. Kelly Poon, Skype President in China
Kelly Poon was Skype’s first employee in China, and she led the company’s entry into the country, signing deals with key partners like Tom.com, Hutchinson and Pacific Internet.
Today, Poon works under Zennström once again, only this time she’s looking to spot potential Atomico investments in China as opposed to launching a new communications platform.
Based in Beijing, Poon is one of just a handful of women to hold a partner-level role in a venture capital industry that is otherwise dominated by men. Her investments include bike-sharing company ofo, as well as European companies like Supercell and 6WunderKinder, which sold its Wunderlist app to Microsoft in June 2015.
9. Michael Jackson, Skype’s Chief Operating Officer
Michael Jackson is the former COO of Skype, where he was responsible for running the revenue generating activities of the company between 2004 and 2007.
From 2007 to 2018, he was a partner at venture capital firm Mangrove Capital, which made $200 million off a $2 million gamble on Skype in its early days. Jackson is also a nonexecutive director at Volvo and AXA.
10. Geoff Prentice, Skype Cofounder and Chief Strategy Officer
Geoff Prentice was the cofounder and chief strategy officer of Skype from 2002 to 2007, and some people regard him as the third-most-important cofounder behind Zennström and Friis.
After Skype, Prentice went on to cofound Atomico with Zennström. He stayed with Atomico in London for six and a half years before moving to Hong Kong to set up his own company in early 2015. That company, Oriente, is a fintech lending venture that’s trying to give people across Asia access to capital.
PayPal Vs. Skype
You’re probably thinking those are some fairly impressive résumés. But one question worth asking is, have the “Skype Mafia” had the same kind of impact as the “PayPal Mafia”?
Skype sold for considerably more than than PayPal went public at ($1.5 billion). But the founders of PayPal—Peter Thiel, Elon Musk, Max Levchin, Ken Howery, Luke Nosek and Yu Pan—subsequently went on to cofound a number of billion-dollar businesses, whereas the founders of Skype did not.
“The Peter Thiel, Elon Musk, Max Levchin, YouTube founders, etc., aren’t really there, which is bizarre for a company that was so important and signature for the EU ecosystem,” said a source that wishes to remain anonymous.
Some say that the Skype Mafia were interested in building a thriving Europrean tech ecosystem, whereas the PayPal Mafia were merely interested in making each other rich in a small exclusive club.
Mark Tluszcz, a partner at Mangrove Capital and the chairman of Israeli website building platform Wix.com, claims there aren’t really that many successful technology companies that have been built by ex-Skypers. “There was a missed opportunity with Skype,” says Tluszcz. “Taavet [from TransferWise] is probably the biggest success story that came out of Skype, and to some extent it’s a shame.”
Meanwhile, over in the U.S., PayPal’s cofounders went on to set up Tesla, SpaceX and Palantir, which are collectively worth around $100 billion, as well as a number of investment firms that are similar to Atomico and Ambient Sound Investments.
“Paypal produced five to ten times the number of millionaires with an exit one half to one third the size, and there are tons of Paypal Mafia that have made a huge difference,” says a venture capitalist that wishes to remain anonymous. “I think a lot of the Skype wealth was hoarded versus spread out, which stifles innovation in the long run.”
Tluszcz says he would have liked to have seen Zennström invest in more of the people who worked for him. “He (Niklas) had the opportunity to be the seed investor for a number of geniuses, and he didn’t do it,” he says. “He never invested, even in TransferWise. It’s almost unimaginable that that would happen. What a missed opportunity. He could have said, ‘I'm going to use this network and say to all the employees of Skype, anybody who wants to raise money, you got a million bucks here anytime you shop at my door.’ He never did that, because that isn’t who he is. He doesn't have the character to be magnanimous.”
These are big claims and a representative for Zennström disputes them, saying that he’s actually invested in over half a dozen ex-Skypers.
Simon Cook, CEO of Draper Esprit, a venture firm with a similar amount of capital to Atomico, says the European venture capital industry wouldn’t be what it is today if it weren’t for Skype. “Skype was the most important turning point in European venture,” he says, adding that Index Ventures did particularly well out of its investment. “Because of Index, you’ve got everything from Adyen to Just Eat. Look at all the successes. There’s been huge numbers of unicorns in Europe, and a lot of them Index has been part of.”
There’s no doubt that Skype has been one of Europe’s biggest tech successes. But why didn’t the success spread far and wide, like similar Silicon Valley exits?
“It would be interesting, if somebody actually had a map of this (the Skype Mafia), I fear we’d be disappointed with the results,” says Tluszcz.
The European tech sector attracts a lot of hype, but still lags well behind the U.S. and China. The continent lacks an Apple, an Amazon or an Alibaba.
It‘s almost 15 years since Skype’s exit. With record numbers of billion-dollar companies now active in Europe, if the leaders of today support and invest in the next generation, European tech might finally come of age.