It’s a private party now – invitation and event platform Eventbrite recently announced its acquisition by tech company Bending Spoons for a discounted cash offer that will take the company off the NYSE. This edition of Your M&A and Corporate Partner examines Eventbrite’s journey from Silicon Valley disruptor to tech bargain and breaks down the lessons business owners can apply to their own companies to preserve their value when considering a transaction.
Eventbrite Inc. recently announced that it entered into a definitive agreement to be acquired by Italian tech and private equity firm Bending Spoons for an all-cash offer of $500 million. The acquisition was unanimously approved by the company’s Board of Directors and will take the company private once again.
Founded in 2006, Eventbrite was created as a self-service event and ticketing platform for smaller organizations that could not afford the high fees and more comprehensive services of platforms such as Ticketmaster. Focused on a smaller, community-driven niche, users could host their own events and find new activities to join in their local area.
With free event listings for free tickets and nominal fees for paid events, the company quickly grew in popularity and became an international brand. The company grossed over $1 billion in ticket sales by 2012 and acquired Ticketfly, a ticketing platform focused on music and venues, from Pandora in 2017 for $200 million. Eventbrite went public on the NYSE in 2018 with a market valuation of approximately $1.76 billion.
The IPO 2018 valuation is far removed from the $500 million deal with Bending Spoons that was recently approved by Eventbrite’s Board of Directors. So what happened?
The COVID-19 pandemic was difficult for most companies, and Eventbrite’s in-person events business model was on the frontline of immediate impact, with the company reportedly losing 90% of revenue in just two weeks. It quickly pivoted to supporting online events, highlighting tools like its timed-entry feature to manage the crowd size of in-person events, and announcing cost-saving layoffs.
Even still, the length of the shutdown impacted its main audience of small, independent events, and the larger venue events like those initially hosted on Ticketfly for years. Add in new competitors in the small-to-mid-sized event niche it had carved, such as Partiful and Cvent, and you have a recipe for value loss.
Now, Bending Spoons’ acquisition of Eventbrite is expected to close in the next few months, with stockholders expected to receive $4.50 per Eventbrite share in cash as the former Silicon Valley standout joins the tech firm’s growing portfolio, which also contains strategically acquired legacy companies such as AOL and Vimeo.
What Can Businesses Learn From This?
As mentioned in the Seattle Seahawks edition of Your M&A and Corporate Partner, timing is key when considering a transaction. The difference in Eventbrite’s valuation from its IPO of nearly $2 billion to its current all-cash offer of $500 million is staggering. While no one may have anticipated the pandemic and its impact on businesses across the globe, if the company had sold at the height of its profitability when it had momentum, it may have tripled the current price.
Eventbrite entered the market as a disruptor, tapping into a new demographic of users with almost no competitors and offering self-service for low costs that ran on volume. Now, competitors have caught up, growth has stalled, and the lightning that Eventbrite captured in the 2010s has escaped its bottle. With Bending Spoons coming in to overhaul operations and update the technology driving Eventbrite’s services with AI tools (today’s tech disruptor), we will soon see if the new owners can return the brand to its billion-dollar glory days.
Interested in exploring the right time to make a transaction for your business? Contact M&A and Corporate lead Connie Phelps at cphelps@berenzweiglaw.com.