SeatGeek charts IPO course after failed SPAC merger
Sometimes the best SPAC mergers are the ones that don’t happen. Or at least that’s the attitude of online ticket marketplace SeatGeek, which recently boarded the SPAC termination train.
Driving the news: SeatGeek on Wednesday announced $238 million in Series E funding at a $1 billion pre-money valuation, led by existing backer Accel.
- Other investors include Arctos Sports Partners, Wellington Management and Ryan Smith (Qualtrics CEO and Utah Jazz owner). Both Accel and Smith had planned to be part of the PIPE transaction tied to the SPAC merger.
- A source close to the New York-based company says it's now gearing up for a late 2023 IPO.
Company brief: SeatGeek primarily competes with Live Nation's TicketMaster as an online marketplace whereby sports teams and venues can manage both their primary and secondary ticket sales. Partners include the Jazz, Dallas Cowboys and New Jersey Nets.
- It also comes up against both StubHub and Vivid Seats on the secondary side.
Backstory: Like all ticket sellers, SeatGeek got crushed by the pandemic. Revenue went from around $200 million to zero.
- So when live events rebounded in the summer and fall 2021, SeatGeek went for the SPAC market's shiny ring of guaranteed money at a good price. Last October it signed an agreement with RedBall, a SPAC formed by pro sports executive Billy Beane and private equity investor Gerry Cardinale, at an implied $1.35 billion valuation.
- By late spring 2022, SeatGeek was reporting record revenue but the SPAC market was tanking. Investors were rushing to redeem shares, almost regardless of the acquisition target. By early June the deal was dead, with neither side willing to stomach renegotiation.
Fast forward: SeatGeek expects to surpass $400 million in revenue this year, and doesn't plan to raise more private capital.
- It might have tried to go public now, absent the new funding, were that a viable option (oh Instacart, an IPO market turns its lonely eyes to you).
The bottom line: In a few years we should remember to compare the performance of companies that went public via SPACs versus those that almost did but then didn't.