Oh boy, another day, another unicorn IPO. This past Wednesday, global ticketing and event technology platform, Eventbrite, announced the pricing of its initial public offering at $23 per share, helping it raise $230 million with an implied valuation of $1.76 billion. The very next day its shares had risen 70 percent to $36 per share – one of the biggest first-day gains in recent months.
Describing why they decided to publicly list their company:
“Over the past twelve years, we’ve shared many amazing moments together with the millions of experiences hosted on our platform. Today, we begin the next chapter of serving your needs as a publicly listed company (NYSE: EB). This grander stage enables us an opportunity to further invest in innovation, connect more people to their passions, and help creators like you find even more success on our platform.”
San Francisco-based Eventbrite was founded in 2006 by Julia and Kevin Hartz to help people list, manage, and sell tickets to all types of events on one global platform. In its pre-IPO stage Eventbrite managed to raise over $330 million giving it a valuation of more than $1 billion. Revenue growth has been impressive with a 51 percent increase to $201.6 million over the 2016 – 2017 period. And its growth seems to be accelerating with the first half of 2018 up 61 percent on the previous year’s first six months.
2018 has been a good year for tech IPOs with 151 companies filing to go public year to date, including an expected 85 IPOs from venture-backed companies. Prominent tech IPOs this year include Spotify, Dropbox, DocuSign, and Zuora.
What can the discerning investor take away from Eventbrite’s brilliant IPO?
Event technology is still booming and the future looks great, with the event management software market expected to grow to $10.57 billion by 2023, at a compound annual growth rate of 11.6%. A lot of this growth is driven by the increased adoption of software solutions by small and medium enterprises.
Umbrella (category and location agnostic) platforms have a valuable role to play – it’s not all about niche applications. That means a glocal approach is still a powerful driver of value. In Eventbrite’s case, revenue outside the US grew from 18 percent to 30 percent over a five-year period from 2012 to 2017.
Eventbrite’s fast accelerating growth, despite being a twelve-year old company and having large competitors like Cvent and etouches, indicates a growing events market with space for multiple complementary players. It also highlights a glaring gap in the market for a platform that markets event professionals (instead of events) on the one hand, while helping people find the right event professionals for their particular events on the other.
Early-stage companies that show grit and perseverance tend to have the right DNA for explosive growth. By early 2009, Eventbrite had been turned down by practically every venture capital firm in Silicon Valley. They decided to grind on with only three employees.
The above positive notes should be seen in conjunction with the rising value of public SaaS platforms and increased early-stage venture backing for private SaaS companies. And take a wild guess who ticks all the boxes?