SeatGeek has purchased Israeli-ticketing company TopTix for $56 million with plans to create a technology-driven rival to Ticketmaster.
The deal was financed by a $57 million Series D investment from Glynn Capital and brings TopTix’s operations in North America and its Israel-based engineering team under the SeatGeek banner. The two companies had already been working together for nearly a year, signing Sporting KC of Major League Soccer to the SeatGeek Open platform, which allows rights holders to sell their tickets through third-party vendors and content partners. TopTix processes about 80 million tickets a year in 16 countries, with clients that include the Netherlands National Soccer Team, Buckingham Palace in London and Ravinia Festival outside Chicago.
The purchase gives SeatGeek an opening into the primary ticketing market, explains SeatGeek co-founder Russell D'Souza. While SeatGeek will continue to operate one of the world’s largest ticket marketplaces, TopTix will handle back-end ticket validation and third-party distribution channels.
"TopTix was built with distribution at its core," D'Souza tells Billboard. "The center of TopTix is this open API system that allows a rights holder within a dashboard to easily distribute tickets. Anyone can go integrate with it; it's inherently very open."
Just as the airline and hotel industries have begun selling their tickets through third-party distributors, D’Souza says he believes venues and teams will eventually forgo exclusive ticketing contracts and work with distribution partners like Amazon, Costco and Expedia. That represents a major disruption of the current model, which relies on big upfront payments and multi-year rebates for ticketing contracts.
“Do I think in 10 years that you're going to necessarily have this model of paying up front and recouping in fees? Probably not,” he tells Billboard. "But we currently live in that world. SeatGeek's got the balance sheet, investor optimism and focus that we can win long-term. But over time, SeatGeek Open's platform isn't about paying upfronts like Ticketmaster does, but rather supporting a system that allows teams to grow their revenue by selling their tickets in more places.”
SeatGeek Open will have built-in secondary-market capability that gives teams and rights holders more control over how their tickets are resold with technology like barcode validation to prevent fraud. D'Souza says his company has already begun a major sales push to sign on new clients.
“It's not about signing everyone under the sun,” he tells Billboard. “It's about finding people who fundamentally are going to be great advocates and paragons of the open system and use it to make more money. Because our hope and our plan is that this will become standard. The entire industry will open up, which will vastly improve the experience and the revenue for sports teams and for artists and for other rights holders.”