The arms race between the UK’s online ticket exchanges shows no sign of slowing.
Seatwave has just received a further $17m (£10m) investment from its venture capital backers. The round comes after Viagogo, its main competitor in the secondary ticketing market, raised $15m in February.
Both based in London, there is little love lost between Seatwave and Viagogo, and their respective founders, Joe Cohen and Eric Baker. The sites allow fans and ticket brokers to buy and sell tickets online, with the sorts of money-back guarantees rarely found from the touts loitering outside venues.
With Accel Partners joining existing investors Fidelity Ventures, Atlas Venture, Mangrove Capital Partners and Adinvest, Seatwave’s series D round takes its total financing to $53m. It reunites the company with Accel’s Sonali De Rycker, who helped found Seatwave while at Atlas.
With 1.9m monthly unique users, Seatwave was named last month the fastest-growing digital media company in Europe at the GP Bullhound Media Momentum awards. The funds will allow it to maintain its growth rate as it moves towards profitability, which Seatwave expects later this year, and expand further abroad after opening sites in Spain, Italy, the Netherlands and Germany.
“Seatwave is one of the very few e-commerce businesses that has managed to go pan-European, which is very capital intensive,” says Ms De Rycker.
With $70m in funding, Viagogo has still raised more than Seatwave. Ms De Rycker says Seatwave needs less capital because it has not made Viagogo’s partnership deals with artists such as Madonna and Michael Jackson, which often involve a substantial upfront payment or sales commitments.
Instead, Seatwave has invested more heavily in advertising that stresses how it can “help find the right fan for your ticket”. Around half of the tickets on the site come from consumers, rather than ticket brokers or corporate resellers, which Seatwave says makes its online marketplace more liquid and brings down prices. For its part, Viagogo claims around 50 per cent of its tickets are sold at less than face value, with 90 per cent of its users selling fewer than 10 tickets a year.
Rarely far from controversy, the ticket-reselling market has fallen into the spotlight again recently after Michael Jackson rearranged some of his forthcoming London tour dates, with concerns that fans buying from second-hand sites would not get their money back.
Seatwave says that if buyers choose not to take an alternative date, they can get a full refund through its insurance company, Mondial, minimising the financial impact on the company. “We are liable for a seller failing to send the tickets through,” says Richard Hurd-Wood, Seatwave’s chief operating officer and UK managing director. “The exposure to us on refunds and insurance is relatively low.”
But dealing with the sudden spike in call-centre demand can be difficult to handle, so some of Seatwave’s extra funds will build out its customer service capacity.
“It’s like the AA, when you have a bad storm everyone calls,” says Ms De Rycker. So Seatwave hired a team from… the AA. “Customer satisfaction is very important. E-commerce businesses are dependant on repeats and coming back to the site direct, rather than going through Google. It takes capital to do that.”
