Eventbrite in the IPO Pipeline

Social networking giant Facebook has helped define successful business models for several other online players. The ticketing company Eventrbrite is one such example. Eventbrite is expected to file for its IPO by the end of this year.  A couple of years ago, I spoke with  co-founder Julia Hartz on the entrepreneurial story of the company. Here is a review of how the company has fared since then.

Eventbrite’s Financials
San Francisco–based Eventbrite was founded in 2006 by serial entrepreneur Kevin Hartz, his wife Julia Hartz and the site’s platform developer, Renaud Visage. Eventbrite is a ticketing platform that lets event organizers put up the details of events online and sell tickets to these shows through their site. Eventbrite is used not only for tech conferences and meetings by small businesses, but also for ticket sales for larger events such as the Black Eyed Peas concert held in New York City’s Central Park in 2011. The site is said to have sold more than 60,000 tickets for the event.

Earlier this year, the company announced the sale of the 50 millionth ticket through its website. Last year, events posted on their site more than doubled to over 458,000. More than 10 million people have attended events ticketed by Eventbrite and to date, the company has helped more than 120,000 event organizers manage more than half a million events across 150 countries. According to management, Eventbrite was on track to sell $400 million worth of tickets in 2011.

Eventbrite earns revenues by charging a transaction fee from the site users. It levies a $0.99 transaction fee on all sale transactions made through the site and charges 2.5% of the ticket fee for each ticket sold. Researchers estimate that Eventbrite is on track to sell tickets worth $1 billion by the end of this year. That translates to an estimated revenue of nearly $50 million for the company. Even at 10x valuation, that would work out to be about $500 million market cap.

Its financials are largely unknown, but management has revealed that it doubled revenues in 2011 over the previous year. To date, the company has received more than $79.5 million in venture funding from investors, including Tiger Global, Sequoia Capital, DAG Ventures, and Tenaya Capital. The latest round of funding of $50 million closed in May 2011 and was largely funded by Tiger Global.

Eventbrite’s Market Expansion
Eventbrite has benefited significantly from social networks such as Facebook and LinkedIn. Analysts believe that for Eventbrite, the largest source of traffic for its social events is Facebook, and traffic for business events is driven by LinkedIn. Eventbrite lets buyers share their event plans on Facebook and thus spread news about the event. The company’s research shows that when a person shares an event through social media sites, he or she is able to generate an average of $12 in additional ticket sales.

Eventbrite is working to launch an Eventbrite Box Office that will let organizers sell and print tickets to their events at the venue. Last December, it launched the At the Door app, which was an iPad-based app that let event organizers sell tickets at a venue. It followed this with a card reader that can be used with iPhones and iPads to accept credit card payments at the venue as well. The reader and the app work together to ensure that when the organizer swipes an attendee’s card, it can obtain that person’s email, name and other information as well, which can be used by the organizer for future events.

Eventbrite is also aligning itself across verticals and recently launched a new vertical, Endurance, that focuses on tickets for races and walks, including marathons, triathlons, fundraising walks, and more. This is the first dedicated, industry-specific ticketing vertical that the company has. Using Endurance, race organizers can sell merchandise along with registration, simplify team registration services and assign bib numbers to participants as they register for the event.

We’re seeing a lot of companies in the $50 million-$100 million revenue range looking to go public in the next 18 months. Given how expensive it is to be a public company these days, it seems to me that once public, these entrepreneurs would have a hard time with the regulatory costs. It would be better to wait a couple years and get to $200 million-$250 million in revenue before taking the leap into the public market.