Two investment headlines from last week caught the eye of the FP&A team here at TheTicketingBusiness.
Firstly, the $73M investment into TodayTix, the mobile-first ticket distribution platform which has sold 4M tickets to date. Secondly – GetYourGuide picks up $484M in Series E funding, putting the valuation of the company (which has now sold 25M tickets through its tourism activity app) above the $1Bn mark.
TodayTix, established in New York City in March 2013 by life-long friends and Broadway producers Merritt Baer and Brian Fenty, the company promotes itself as “the premier digital gateway to shows, arts and cultural experiences”. At the heart of this is a slick, mobile-first ticketing platform which allows audiences to “discover, explore and engage with the best entertainment their city has to offer”.
To enable this TodayTix needs content i.e. tickets to shows, and it currently cites more than 1,300 partners in 15 markets around the world, including New York City, London’s West End, Toronto, the San Francisco Bay Area, Los Angeles, Seattle, Washington DC, Chicago, and Australia.
“TodayTix is geared towards the ‘spontaneous’ buying habits of younger audiences”
Since its inception TodayTix claims it has “engaged more than 5.2 million users to connect beyond ticketing into new cultural experiences” – with its digital lottery and mobile marketing activations seen as key sales drivers and product differentiator from traditional ticket outlets. With these “access programmes” users share entries with their social networks, unlocking special pricing to the listed events.
The TodayTix service is geared towards the “spontaneous” buying habits of younger audiences. As such, TodayTix claims it has generated more than 11.6M digital lottery entries and 2.3M social shares through 900 campaign activations to date.
Reportedly the average age of its App user is 32 years old – and it claims 1.5M users per month and a 57.5% repeat transaction with some 90% of users classified as “new to the venue”.
One of the key benefits of the platform is the “expansive trove of customer and marketing data, tuned-in customer base, and expanding media services” which suggests that it will continue to grow its own original programming (‘promoter’) business and create its own shows with exclusive ticket offers via the TodayTix app and web site.
The announcement of a $73M growth equity investment (led by PE Great Hill Partners) marks the start of the next stage of development including the buying out of a number of original investors as well as global growth from “utilizing the company’s proprietary data-driven audience feedback to offer new shows, arts and cultural experiences and double down on expanding its technologies in discovery and personalization for both consumers and partners.”
“TodayTix is positioning itself as an ally to the sector – offering penetration to new audiences”
So, rather than competing with primary ticket retailers, TodayTix is positioning itself as an ally and partner to the sector whilst offering penetration to new audiences.
VOLUMES & REVENUES
This latest investment in TodayTix brings total capital raised to approximately $88.7M in funding over four rounds, and it claims to have “sold more than 4 million tickets to date, accounting for eight percent of all Broadway tickets sold annually and four percent in London’s West End”.
On first read this statement suggests that the platform is shifting over 1.1M tickets (8%) of the official Broadway annual admissions which, courtesy of The Broadway League) research is 13.8M in 2017-18. But TodayTix has confirmed that the 8% and 4% claims refer to “current run rates” so actuall volumes will be significantly less than 1M for Broadway.
The company further states that it has generated “$260 Million in purchase volumes and consumer savings” to date, as not all tickets sold on TodayTix are necessarily full price.
Historically, a number of its partners have viewed TodayTix as a ‘channel’ to market generally offering the “more difficult to shift” event-day, discounted and late availability inventory.
A key revenue performance metric is therefore the TodayTix margin in such discounted inventory.
But there is also some added-value in the lottery gamification where new customer data is shared with partners to provide additional upsale opportunities. Reportedly over 800 productions have used TodayTix “access technology” resulting in 10.7M entries, 2.3M social shares and 260M impressions.
TODAY & TOMORROW-TIX
Some analysts have questioned the circa $88.7M in funding for a company that has sold just 4 million tickets over its 6 years in business. But this metric overlooks the potential of the company’s growth, and the short-term future looks very positive for the company. Large investment, proven product, and growing client list. Arguably, unlocking the Millennials market for the performing arts has never been quite so easy.
With the latest investment Great Hill Partners are in the driving seat, but the original founders remain on with a “significant stake” in the business reports a company spokesperson.
“By understanding the ways next-generation audiences purchase and experience shows, we can forever change the way people discover art in their cities,” said TodayTix CEO and Co-Founder Brian Fenty. “Our audiences, married with a community of visionary content creators, establish an unprecedented ecosystem of engagement between the two sides of live entertainment. While ticket sales are the bedrock of our relationships, these are only the beginning of our content and discovery ambitions.”
“While ticket sales are the bedrock of our relationships, these are only the beginning of our content and discovery ambitions”
However, one question for its current and future potential partners is whether the “new audiences” TodayTix claims to reach would have been reached via other distribution channels. Does it grow the overall size of the market i.e. attract more ticket buyers, rather than simply converting, say, offline kiosk sales or walk-ups into online or mobile sales?
TOURISTS AND TICKETS
Whilst the scale of the TodayTix investment is impressive, it is dwarfed by the Series E funding round for the Berlin-based online marketplace GetYourGuide.
Firmly placed in the ‘travel experiences’ sector which is estimated to be worth US$150Bn and growing at 20% Y-O-Y, this start-up is competing against the large-scale travel operators, sector specialists including Expedia and TripAdvisor/Viator and disruptive new entrants such as Airbnb.
Last week GetYourGuide announced a US$484M investment – pushing its valuation above the US$1Bn mark – as the highest-ever round of funding for a company in the “tours and other activities” space and one of the biggest-ever growth rounds for any European startup.
“(It is) the highest-ever round of funding for a business in the ticketing/tours space and one of the biggest-ever growth rounds for any European startup”
In 2017 the company listed 35,000 ‘experiences’ in its online catalogue, selling some 10 million tickets that year. It has now sold to date a total of 25 million tickets and boasts a catalogue of approximately 50,000+ experiences.
The latest funding will apparently enable the global rollout and marketing drive, especially in the Asian and the U.S. markets but will also be used to fund some of its own productions under its “Originals” tour experiences brand – with GetYourGuide reporting it has sold 40,000 of its own packages to date.
NEW AUDIENCES BUY DIFFERENTLY
Like TodayTix, GetYourGuide is targeted towards younger audiences with the average user apparently aged 25-40. Reportedly Millennials don’t like to plan too far ahead and then engage socially i.e. inviting others to join them in the experience with the growth of split-payment technologies.
The success of GetYourGuide and others is forcing the broader travel market to rethink the events and activities aspect of tourism. Tour packages were historically associated with older groups and families who typically want to plan itineraries in advance, but for younger customers it is the ‘experience’ that is driving the purchase decision.
“Tour packages were historically associated with older groups, but for younger customers it is the ‘experience’ that is driving the purchase decision”
By making the travel, and experience, booking process more mobile-friendly, GetYourGuide has tapped into the current market psyche, driven by social media. Simply put: list the experience on Instagram, whilst offering a link to book it, inviting your friends, whom all then socially post to their wider networks.
For example, GetYourGuide has experimented with a custom ‘GetYourGuide Instagram Tour of Bali’. These marketing initiatives have taken off to such an extent that they are the market-leading tours across 50+ destinations. Interestingly, GetYourGuide recently appointed Ameet Ranadive, formerly of Instagram, as Chief Product Officer.
Going forward it’s likely that GetYourGuide’s own curated trips or in-house produced experiences will deliver the greatest margin which will inevitably lead to greater development away from simply aggregating 3rd Party inventory.
“Consumers, especially millennials, are spending an increasing portion of their disposable income on travel experiences,” said Ted Fike, partner at SoftBank Investment Advisers, which acted as the lead investor to this latest round. “We believe GetYourGuide is leading this seismic shift by consolidating the fragmented global supply base of tour operators and modernizing access for travelers globally.”
Different Margins for Different Folks
The margins in travel experience ticket sales are typically in the 10-20 per cent range, which dwarves those of the single-digits margin available via sports and entertainment ticketing.
But, whether it’s TodayTix or GetYourGuide, offering a mobile-first and socially-integrated booking process is proving one way to reach the new breed of spontaneous consumer.
Additionally, once onboarded there are an increased number of opportunities for upselling, add-ons and incremental products – Insurance, Car-Hire, Parking, Event Equipment Hire – which is why the larger travel and event ticketing operators are looking at new alliances across the travel vertical.
And, it’s no wonder investment funds are taking a closer look at those businesses which are linking discovery with convenience to access experiences. Watch this space!
Other articles in our Finance Insights series:
- (15 May 2019): LiveNation Entertainment Q1/19 Analysis
- (26 April 2019): StubHub’s performance in the wider eBay picture
- (19 April 2019): DEAG – Growing & diversifying the portfolio
- (4 April 2019): Eventbrite’s stock performance since IPO
- (22 March 2019): CTS Eventim’s dividends and performance
*ABOUT THIS ANALYSIS: This series of financial insights is provided by the The FP&A Team at TheTicketingBusiness. The FP&A Team comprises a group of industry finance experts who volunteer their expertise to provide ad hoc analysis of key industry financial, M&A, funding and investment news. All in an effort to better-inform the market and support the industry’s long term development. Any questions or feedback welcome to [email protected]
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