by George White
[Posted on February 11, 2008 - 6:02 PM]
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DiggAfter closing a $25 million round Series C venture funding, European event ticket exchange Seatwave has enough money to get everyone a seat for the big game.
The London startup tapped new investor Fidelity Ventures of Boston to lead the round, giving it $36 million in financing since forming in April 2006. Also participating were insiders Atlas Venture of Waltham, Mass., Mangrove Capital Partners of Luxembourg and Zurich-based Adinvest AG.
Seatwave, which launched commercially in the U.K. in April 2007, is the brainchild of CEO Joseph Cohen, formerly a senior executive at Ticketmaster and Match.com LLC. Seatwave plans to use the proceeds to expand its secondary ticket market services in Europe.
"In the past 12 months we've been able to build up a pretty strong position in the U.K.," Cohen said. "We feel as though there's a great opportunity to cross the European continent for the type of service that we offer, so we're going to use the majority of the funds to roll out our business in the four markets we launched in at the end of last year."
Seatwave launched ticket exchanges in Germany, the Netherlands, Spain and Italy in late 2007. While declining to specify an exact valuation, Cohen did say the current round represented an increase to that of the company's $8 million Series B in June 2007. Before that Seatwave received a $3 million Series A in July 2006.
Cohen predicted that Seatwave likely will not need to raise additional venture capital.
"Given the way the business generates cash, our growth curve and what our cash needs are, it seems unlikely, but you never know what comes your way," he said.
Secondary ticket markets in Europe have been booming as startups such as Seatwave offer platforms to create a marketplace for sellers and give buyers more transparent pricing and a guarantee of valid tickets for sporting events and concerts. Seatwave offers a 150% refund guarantee if a buyer doesn't get a ticket or receives a wrong ticket.
"Ticketing ... has been a cartel industry that's treated customers like a commodity," Cohen said. "We believe there's a real opportunity to raise the level of consumer friendliness and protections in order to reach a new bar."
Focusing on the customer has paid off for Seatwave, as the company's revenue has been growing 100% each quarter, Cohen said. The company is expected to reach profitability by the second half of 2009, he added.
Seatwave estimates that the U.K. market generates roughly $1.9 billion in aggregate sales. That figure is an estimated $6.8 billion to $9.7 billion for all of Europe.
"There's much less of a negative regulatory landscape in Europe relative to the U.S., although it has changed considerably in the U.S. in the last year," said Cohen, who will direct the new capital primarily toward "building market share, developing partnerships and establishing the Seatwave [brand]."
The market's potential has been drawing venture dollars to competitors as well. For example, competing service Viagogo Ltd. has secured about $50 million in total funding from Index Ventures and angel investors.
Over the past 13 months, deep-pocketed buyers started taking notice of the lucrative opportunities in the secondary ticketing market and have scooped startups in the space. Last month IAC/InterActiveCorp, the parent of Ticketmaster, bought TicketsNow and U.K.-based GetMeIn.com. TicketsNow fetched $265 million, according to numerous reports, providing an exit for Adams Street Partners, DFJ Portage Venture Partners and New World Ventures. The value on the GetMeIn.com buy was undisclosed. And in January 2007 eBay Inc. acquired StubHub Inc. for $310 million, cashing out Allen & Co. LLC, Blue Water Capital, Pequot Ventures and Staenberg Venture Partners.
"We were certain there would be a multitude of players that would want to come into this market, particularly with the exits that have occurred in the U.S.," Cohen said. "Given that competition is going to heat up we thought it was important to get out there and build market share."
