Sydney artificial intelligence start-up Search.io sold for millions

The two men sold their start-up for millions with the acquisition set to give the “market a heart attack”, according to one of its founders.

Two men became millionaires overnight after their company was snapped up by a French unicorn. Picture: Getty Images

Two Australian men have become multi-millionaires overnight after their start-up was bought for more millions.

The Sydney-based company called Search.io, which specialises in artificial intelligence-based search, was acquired by a French unicorn – a colloquialism used to describe a start-up valued at over $1 billion – called Algolia.

The start-up was founded seven years ago by Hamish Ogilvy and David Howden, with its search engine used by the likes of online retailer Catch, audio company Sennheiser as well as the New South Wales government.

Meanwhile, Algolia employs more than 750 people and was valued at $US2.3 billion last year.

Mr Ogilvy revealed that his start-up had been “stalked” by the French firm, which he said is the second biggest search company behind Google, after he revealed on Twitter last year that the business had run more than 500 million search queries.

Hamish Ogilvy said the acquisition would give the market a ‘heart attack’. Picture: Twitter

Initially the companies were “stand-offish” with each other as there were concerns they were competitors, he added.

But they quickly realised the “market would have a heart attack” if they joined forces, he said.

It was lucky timing for Search.io, which employs around 34 people, after a local venture fund pulled $A20 million worth of funding at the last minute.

“The legals were all done, the paperwork was ready to go … it put things in turmoil. It was a difficult situation to navigate during a market crash,” Mr Ogilvy told the Australian Financial Review.

“I had mixed feelings [about selling the business], [as a founder] you can know you’ll have a very big company if you have the investment and firepower, but you have to look at the timeline to do that, who you’re going up against, and weigh it up.

“One path has less risk and is the fast path to the end game. The other has more risk, but you have a shot at something large. On balance, I think this was the right decision.”

David Howden is one of the founders of Search.io. Picture: Twitter

Bernadette Nixon, chief executive officer at Algolia, said the merger would “disrupt the search market significantly” and came after it hired more than 145 people in just the second quarter of this year.

Start-ups have been hard hit by a slowdown in investment and last month an Australian healthcare start-up called Eucalyptus that provides treatments for obesity, acne and erectile dysfunction fired up to 20 per cent of staff.

It blamed an investment firm pulling an agreement to loan the company money as the reason for the cuts.

Other start-ups have gone under owing millions in debt.