SeatGeek, a marketplace for third-party sports, concert, and theater tickets, is hoping its latest acquistion cements its place as a leader in the ticketing industry.
Today, the 8-year-old company announced it is acquiring TopTix, an Israeli ticketing software company that has processed over 80 million ticket sales, for $56 million in an effort to bolster and expand its newly-launched feature, SeatGeek Open. An open distribution platform, SeatGeek Open enables apps and websites to sell verified tickets directly to consumers. For instance, customers could request an Uber ride and buy a concert ticket seamlessly without ever leaving the Uber app.
SeatGeek initially approached TopTix last year because it wanted to license its software to run the back-end technology of SeatGeek Open. “We were impressed by the power of the platform,” says SeatGeek co-founder Jack Groetzinger.
Clearly. Following the acquisition, TopTix will operate as a subsidiary of SeatGeek. Its team of more than 100 staffers will be absorbed into the company, bringing SeatGeek’s total employee count to more than 250.
The TopTix deal is significant because it will allow SeatGeek to better compete with legacy rivals like Ticketmaster and StubHub by expanding its open distribution model into new markets.
As of November, SeatGeek had nearly 8 million app downloads. Although the company declined to offer specifics on revenue, SeatGeek processes at least $1 million in transactions per day and takes a commission of 8% to 14% on each ticket sale. On the low end, that puts them at about $29 million in annual revenue. Their revenue has been previously pegged at $25 million.
Although Groetzinger said he had no intention to raise additional capital, that changed when the opportunity to buy TopTix came up. SeatGeek financed the purchase by raising $57 million in Series D funding. Glynn Capital led the round, and was joined by existing investors Accel, Causeway Media Partners, Haystack Partners, Mousse Partners, and Technology Crossover Ventures.