Season ticket management and exchange software firm UsherPro officially emerged from stealth fund-raising mode last week following an announcement that prominent radio executive James de Castro had invested a significant amount of money in the company and took a seat on its board of directors. In a recent interview, Private Equity Week learned that the Wood Dale, Ill.-based start-up is currently shopping its Series B offering to other investors, and is looking to close on $5 million by the end of May.
“One of the things we want Jimmy to focus on in his relationship with our company is bringing [the round] to the investment community for us and working with us to close our second round,” said Bob McAuliff, chairman and chief executive with UsherPro.
De Castro is also well-connected in the sports, entertainment and broadcast industries and, as such, has been brought on board at UsherPro to help the company carve inroads into those arenas, where it might eventually explore additional ticket exchange opportunities.
The exact amount of de Castro’s investment has not been disclosed, nor would McAuliff say if any other investors have signed on yet. However, he did say that although the company had previously been involved in discussions with investors, the offering wasn’t publicly announced until last week, which suggests that de Castro may indeed be the round’s sole contributor to date.
Previously, UsherPro had been funded mostly by angel investors, and is now looking for “smart money” backers that can help it expand and gain faster market penetration, McAuliff said. Moreover, the company expects its Series B round to bridge it to profitability, a milestone it expects to reach sometime in 2002.
To that end, McAuliff already has the expected proceeds from the company’s upcoming round spent, at least in his mind. A majority of the capital is slated for additional upgrades to UsherPro’s technology, while the rest will likely go toward staffing up the company’s sales and marketing and research and development departments.
Red-Hot Tickets For Sale
Essentially, UsherPro is in the business of providing ticket management and exchange solutions for sports teams, venues and promoters.
“There is a big need in the marketplace related to people and corporations that invest millions of dollars in tickets,” McAuliff explained. “Not everyone can go to every game, so many tickets go unused and premium seats [go unfilled]. We provide a tool allowing these people to resell their unused tickets.”
UsherPro enables ticket sellers to unload their seats in one of two ways, either through a classified ad or auction set-up on a team or venue Web site. In many cases, the season ticket holder wins out because he ends up generating a profit on his unused ticket, while fans also benefit from access to decent seats.
Venues and teams share in the wealth as well. For example, increased attendance not only means more revenue from parking fees, merchandise and concessions sales, but also means sponsors know they are getting more eyeballs on their advertisements.
UsherPro also seeks a piece of the overall revenue, although it derives its primary income from selling its ticket management software to teams and venues.
Although it would seem that UsherPro’s business model slightly blurs the line between scalping and a legitimate ticket outlet, McAuliff said that the company has a patent-pending, proprietary process that will legalize its services in every state, even the ones where it is currently illegal to resell tickets. He declined to elaborate further, citing concerns about leaking the specifics of the company’s proprietary technology to competitors.
UsherPro acquired privately-held ticket exchange software provider Season Perks Inc. earlier this month in an all-stock deal to help it demystify some of the legal loopholes behind each state’s ticket-selling requirements, McAuliff said.
“There’s a real flexibility in our business model that’s based on what the team and venue wants to do,” McAuliff noted. “We’re not a broker. We’re all about the exchanging of tickets and bringing value back to the team and venue.”
UsherPro’s client list includes such big-name venues as the Staples Center in Los Angeles, Toronto’s SkyDome and The Fleet Center in Boston.
Contact Robyn Kurdek.