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2018 IPO Prospects: Eventbrite Caves In, Decides to List

Posted on Wednesday, Sep 19th 2018

Billion Dollar Unicorn and event management and ticketing website Eventbrite has been trying to stay independent for a while now. It preferred its private status so that it could have more control over its functioning and to stay away from the numbers driven approach of analysts. But the company recently decided to go public and has provided more insight into its financials.

Eventbrite’s Offerings

San Francisco-based Eventbrite was founded in 2006 by entrepreneur Kevin Hartz; his wife and MTV veteran Julia Hartz; and platform developer Renaud Visage. The idea came to the founders after they created a basic architecture based on the PayPal platform to sell tickets. Soon, they designed a platform that could enable creators to seamlessly plan, promote, and produce live events while increasing reach and drive ticket sales. By 2017, EventBrite had worked with more than 700,000 creators, helping them issue 203 million tickets across three million events in over 170 countries. Its solution caters to events ranging from fundraisers, seminars, wellness activities, and music festivals to classes and cultural celebrations.

Eventbrite earns revenues by charging a service fee and a payment processing fee on tickets sold on its platform. Events that have free tickets do not earn any revenues for the company. Eventbrite fee ranges from 2% of the ticket price plus $0.79 per paid ticket to 3.5% of the ticket price plus $1.59 per paid ticket. The tiered pricing allows Eventbrite to offer services such as unlimited types of tickets, detailed sales analytics, and seat reservation capabilities.

The company has seen strong revenue growth over the past few years. But revenues haven’t translated to profits. In 2017, its net revenue grew 51% to $201.6 million. For the six months ended June 30 2018, revenues grew 61% to $142.1 million. Net loss for 2017 came in at $38.5 million compared with $40.4 million a year ago. For the six months ended June 2018, net losses grew from $8.3 million to $15.6 million. On an adjusted basis, adjusted EBITDA grew from a loss of $17.6 million in 2016 to earnings of $4.2 million in 2017. For the six month period ended June 2018, adjusted EBITDA improved from $3.7 million to $10 million.

Eventbrite has been venture funded so far, having raised $332.2 million from investors including Tiger Global Management, T. Rowe Price, 137 Ventures, DAG Ventures, Tenaya Capital, Sequoia Capital, SV Angel, and several other individual investors. Its last round of funding was held in September 2017 when it raised $134 at an undisclosed valuation. An earlier funding round held in 2014 had pegged its valuation to over $1 billion.

Earlier last month, Eventbrite filed to go public. It has priced its shares at a price range of $19-$21 and plans to raise $200 million at a valuation of $1.8 billion. Obviously, that much funding requires that the investors get an exit, and an IPO has to happen sooner or later, unless someone wanted to acquire the company.

Eventbrite’s Competition

Eventbrite may be a veteran in the industry, but, compared to other players like Live Nation and TicketMaster, it is still a very small player. For instance, LiveNation recorded revenues of $10.4 billion last year. LiveNation has been growing its international and domestic footprint by tying up with telecommunications companies. For instance, in the US, it has tied up with TMobile, and in Australia with Optus to deliver exclusive access to ticket presales at select Live Nation events and tours, unique promotions, and premium experiences to postpaid, prepaid, and broadband customers. Additionally, companies like Facebook are making it difficult for Eventbrite by integrating ticket purchasing options in its newsfeed. Facebook drives traffic both to Ticketmaster and Eventbrite. But it keeps the user on its portal, not allowing the user to browse other events on the ticket seller’s site.

Eventbrite had decided not to go public because it wanted to stay away from the “amount of bureaucracy a company has to go through” as part of the listing process. Investors must have been looking for an exit, and the company is probably in the need of funds, resulting in the listing.

As end consumers, I would like to know if you have preference for the site that you buy tickets from? Are you indifferent to using Eventbrite, or TicketMaster, or StubHub? And for organizers, what is it that Eventbrite offers that makes you want to choose it over the others?

More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns.

This segment is a part in the series : 2018 IPO Prospects

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