Online ticketing company Eventbrite Inc. (EB) joined the growing list of high-flying tech companies that hit the public markets this year in a blowout initial public offering (IPO) in which shares jumped near 60% at the opening bell.
The San Francisco-based tech unicorn priced shares at $23 on Wednesday, at the high end of its most recent $21 to $23 range, raising $230 million with the sale of 10 million shares and implying a valuation over $1.76 billion. Trading on the New York Stock Exchange (NYSE) at a price of $37.78 on Thursday afternoon, the stock is up over 64%.
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Burgeoning Appetite for Mid-Market Event Ticketing a 'Rare' Opportunity
Eventbrite relies on small-scale ticketing and event management, dealing with lower-profile events. As a result, it doesn't rely on exclusive access to major sporting events. The newly public company has been compared to Live Nation Entertainment Inc. (LYV), although differences include the latter's high ticket fees and major promotional and venue-operations businesses. What both companies have in common however, is that they continue to benefit from a widespread trend wherein consumers are spending more on experiences over products.
Eventbrite's S-1 filing indicates that the firm plans to use the proceeds to increase its capitalization and financial flexibility and to reduce its debt, currently at $66.4 million. Co-founder and Chief Executive Office (CEO) Julia Hartz told CNBC that the firm will invest "in the future, and so whether that's expanding into more categories or countries, that's really where we're focused."
Eventbrite charges event creators a percentage of every ticket that's sold on its platform. In the first half of 2018, Eventbrite posted revenue of $142.1 million, up 61% over the same period last year. Meanwhile, the 12-year-old firm has struggled to turn a profit, posting a $1.98 per share loss in 2017, an improvement from a $2.48 per share loss the year prior. The first half of 2018 marked another positive movement towards profitability, with the ticketing site posting a loss of $15.6 million, or $0.73 per share for the six month period. Eventbrite indicates that it is free cash flow positive.
Hartz tells CNBC that the "appetite for a platform like Eventbrite... is something that's quite rare." The mid-market event ticketing site sold over 203 million tickets to 3 million events in 2017. Since 2015, the event platform has acquired seven companies, including a deal with Pandora Media Inc. (P) to purchase Ticketfly for $200 million last year.
Tiger Global Management owns a 20.8% stake in Eventbrite, followed by Sequoia Capital at 17.6%, and Hartz' 14.6% ownership.
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