SeatGeek charts IPO course after failed SPAC merger

Sometimes the best SPAC merges 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 a $238 million Series E funding at a pre-money valuation of $1 billion, led by existing backer Accel.

  • Other investors include Arctos Sports Partners, Wellington Management and Ryan Smith (CEO of Qualtrics and owner of Utah Jazz). Accel and Smith had planned to be part of the PIPE transaction related to the SPAC merger.
  • A source close to the New York-based company said it is now gearing up for an IPO in late 2023.

Brief company: SeatGeek primarily competes with Live Nation’s TicketMaster as an online marketplace where 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 clashes with StubHub and Vivid Seats on the secondary side.

Past: Like all ticket sellers, SeatGeek has been crushed by the pandemic. Revenue went from about $200 million to zero.

  • So when live events rebounded in the summer and fall of 2021, SeatGeek opted for the guaranteed silver shiny ring from the SPAC market at a good price. Last October, he signed a deal with RedBall, a SPAC formed by professional sports executive Billy Beane and private equity investor Gerry Cardinale, for an implied valuation of $1.35 billion.
  • In late spring 2022, SeatGeek was recording record revenues, but the SPAC market was collapsing. Investors were rushing to buy back shares, almost regardless of the acquisition target. By early June, the deal was dead, with neither side willing to renegotiate.

Fast forward: SeatGeek expects to exceed $400 million in revenue this year and does not plan to raise more private capital.

  • It might have tried going public now, absent the new funding, if that was a viable option (oh Instacart, an IPO marketplace is turning its lonely eyes on you).

The bottom line: Years from now, we should remember to compare the performance of companies that went public via SPACs versus those that came close but didn’t.

Comments are closed.