Eventbrite Goes On a $50 Million E Ticket Ride
Nobody under 40 would remember this, but until 1982, Disney sold tickets in its theme parks by the ride rather than charging admission by the day. The newest, best rides required an E ticket, which was the most expensive denomination, hence the popular phrase “E Ticket Ride,” referring to “an unusually interesting, thrilling, or expensive experience,” as Wikipedia puts it. Well, that’s basically what San Francisco-based Eventbrite is getting into—it announced today that it has raised $50 million in Series E financing, dwarfing the $30 million it had raised in its A through D rounds combined.
The event ticketing startup’s previous investors include Sequoia Capital, DAG Ventures, and Tenaya Capital, and some of them re-upped for the Series E round, according to Eventbrite CEO Kevin Hartz. But essentially all of the new money comes from Tiger Global, a New York-based investment firm that manages hedge funds and private equity funds.
Hartz says Eventbrite was attracted to Tiger because of its successful track record investing in other expansion-stage companies such as LinkedIn and Zynga, and because it’s also active outside the United States. “They have that global perspective,” says Hartz. “We do about 20 percent of our revenues outside the United States, and we see a massive opportunity that we just haven’t tapped yet,” particularly in Western Europe, South America, and India.
I talked with Hartz this morning about how the 144-employee company, which recently moved into renovated digs in San Francisco’s SoMa neighborhood, plans to put the new money to work. The truth is that a lot of it will stay in the bank for the moment. “We’ve raised $80 million and we still have $70 million of it, which just speaks to the capital efficiency here,” says Hartz. “We want to build a company that will still be here in a few decades, and this beefed-up balance sheet will solve that financial equation.”
But the money will soon start to flow out in at least four directions, according to Hartz. One will be aggressive international expansion, to places like Brazil. Another will be hiring more engineers to add features to Eventbrite’s online and mobile ticketing platforms.
Third, the company needs to hire more customer-service reps; it gets “several thousand calls a week” from organizations using Eventbrite to manage their events and wants to make sure that 97 percent of those calls get answered by a live human within 30 seconds, Hartz says. (With all that hiring, the company will have close to 200 staffers by the end of this year; there’s room for as many as 300 at the current location, he says.)
Finally, Eventbrite will use its expanded war chest to make acquisitions, going after both direct competitors and companies with complementary platforms or those serving adjacent markets, says Hartz.
The really big picture, though, is that Eventbrite sees itself as a sort of modern day eBay, exploiting technology to enable whole new markets to emerge around events. It’s in this way that Eventbrite hopes to outmaneuver event industry stalwarts such as Ticketmaster. “In the mid to late 90s, eBay came along, and everyone used to say it was the big traditional auction houses like Bonhams & Butterfields that would have to compete with them,” says Hartz. “But really, eBay was enabling this whole market outside of that, and the traditional auction houses were insignificant in comparison.”
In the same way, Hartz says, Eventbrite hopes to “democratize” events, making it easier for any organization to market events, sell tickets, manage admissions at the door without having to turn over such large commissions to agencies like Ticketmaster.
And increasingly, Eventbrite is taking on Ticketmaster directly. On June 9, the Black Eyed Peas will give their first-ever live concert in New York’s Central Park, as a benefit for Robin Hood, a group battling poverty in New York. Eventbrite is the sole ticketing partner for the event, which could turn out to be the largest the company has ever handled. Hartz says he’s confident Eventbrite can handle the twin challenges of large-scale ticketing: first, the rush of tens of thousands of people seeking to buy tickets online, and second, ticket scanning at the event gates, where the problem is preventing entry by people with duplicate or counterfeit tickets.
The startup has already released ticket-scanning app for iOS devices (iPhone, iPad, and iPod Touch) and it’s about to start demonstrating an enhanced, iPad-based system called “Eventbrite at the Door.” Says Hartz, “You’ll be able to check people off at will-call, manage inventory, and conduct credit-card sales at the door, and it can be used for the largest venues all the way down to your events”—meaning Xconomy’s, which are usually in the neighborhood of 100 to 400 attendees.
Eventbrite will be in good company in Tiger Global’s portfolio—the firm has large stakes in tech companies like Apple, Amazon, and Netflix. Hartz says the lead Tiger Global investor on the Eventbrite deal is managing director Lee Fixel, who’s also on the boards of Netshoes, Flipkart, and Jobs.ch. “He’s great,” says Hartz. “He’s 31 years old, and he’s traveled a couple hundred thousand miles last year with investments in China, Brazil, and Russia, so he has a very interesting perspective … Tiger Global is a relatively new player on the scene, but one that is having a great influence.”