Posted on Wednesday, Mar 4th 2015
It is interesting to note the wide array of private companies that have no desire to go public soon. There is a growing list of founders who are convinced that they want to stay away from the prying eyes of analysts and the high costs of regulatory requirements and maintain their freedom of operating their companies on their terms. One such company is Billion Dollar Unicorn club member Eventbrite.
San Francisco-based Eventbrite was founded in 2006 by entrepreneur Kevin Hartz; his wife and MTV veteran Julia Hartz; and platform developer Renaud Visage. Eventbrite came into being when the founders created a rudimentary architecture based on the PayPal platform to sell tickets. Kevin and Julia Hartz followed the principles of bootstrapping first and raising money later diligently. The company set up operations after they met Renaud Visage on his way out of Zing and back to France. They shared their idea of the platform with him, and within two days, the three decided to set up Eventbrite. Kevin and Julia contributed the $250,000 of seed funding needed to get the company off the ground. The three of them worked together for two years to create a product that facilitates gatherings by helping people find and attend events that feed their interests. They released the service and kept on improving on it based on customer feedback.
Eventbrite’s platform lets organizers create event web pages, integrate social networks to invite people to these events, and allow organizers to get money by selling tickets. Organizers have the ability to offer reserved seating, watch real-time progress of event participation statistics, and even collect money through their payment processing system.
Their product initially attracted the early adopters in the technology community, but today they have a much wider audience. Eventbrite is not only used by companies to manage conferences and meetings, but their platform is now also being used by larger event organizers to manage ticket sales for events like the Black Eyed Peas concert held in New York City.
Eventbrite operates on a freemium model that lets organizers use their platform for free if they are not charging for tickets. Organizers have access to the platform which comes with features such as reporting and promotional tools, mobile sales and box office features, and 24 x 7 customer support. Eventbrite earns revenues by levying a service fee and a payment processing fee on tickets sold on their platform. A fee of 2.5% of the ticket price with a cap of $9.95 and an additional $0.99 per ticket sold is charged as the service fee for their platform. For organizers using their payment processing platform, Eventbrite charges a 3% payment processing fee. For tickets sold on-site with their mobile apps, organizers have to pay only the 3% payment processing fee.
Eventbrite does not disclose their financials, but analysts estimated that they were on track to earn $50 million in revenues as of 2012. In 2014, Eventbrite processed $1.5 Billion worth of free and paid tickets through their apps for over 80 million events. Their profits are not known, but they had reported a break even back in 2009.
They have been venture funded so far with $199.6 million in funding from investors including Tiger Global Management, T. Rowe Price, 137 Ventures, DAG Ventures, Tenaya Capital, Sequoia Capital, SV Angel, and several other individual investors. Their last round of funding was held in March 2014 when they raised $60 million from Tiger Global Management and T. Rowe Price at a valuation of over $1 billion.
Eventbrite is convinced that they do not want to go public soon as they want to stay away from the “amount of bureaucracy a company has to go through” as part of that process. They are now planning to improve their offerings on the buyer’s side of the event to create a more active and engaged buying community on their platform.
Eventually, of course, being a venture-funded company, they will need to exit. However, for now, private capital is abundantly available, if they choose to prolong their private status.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
This segment is a part in the series : Billion Dollar Unicorns
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What is Okta's Inorganic Growth Narrative?