Although Season Ticket Solutions officially announced that it was deep in the throes of raising a $5 million Series B round back in April, the company only last week signed on a lead investor after a brief stint on the fund-raising sidelines.
“The market is horrible, and my decision was to turn the engine off on [the round for awhile] because I don?t want to give the whole company away to raise money,” said Bob McAuliff, chairman and chief executive with Season Ticket Solutions.
In the interim, the Chicago-based company, formerly known as UsherPro, has been sustaining itself with reserves it had on hand from its angel investors. It also received a significant capital infusion from well-known radio executive James de Castro back in April to kick off its Series B round.
After watching Season Ticket Solutions reach several critical milestones in its business plan, including a merger with No. 1 competitor Season Ticket Networks in June, InvestLinc Financial Services LLC came on board to set the terms of the second round transaction. InvestLinc, who is also the company?s first institutional investor, put up an undisclosed amount of capital.
The round will remain open for the next two to three months to accommodate additional investors, McAuliff said. Because the company is shopping the deal to prospective backers, he declined to divulge who some of the interested parties might be.
As its moniker implies, Season Ticket Solutions provides ticket management, exchange and group sales marketing software for sports teams, venues, event promoters, season ticket holders and corporations.
In addition to pounding the VC pavement, McAuliff plans to drive up the company?s valuation by acquiring new customers and rolling out a patent-pending ticket exchange technology. The service will enable season ticket holders to resell their seats either through classified ads or an auction-style setup on a team or venue Web site. Season Ticket Solutions will also derive some income from the exchange, which will ultimately provide 90% of its revenue stream, McAuliff said. The remaining 10% will come from recurring revenue generated from sales of the company?s ticket management software product.
So far, the company has signed on more than 60 sports teams and venues as customers, including the Vancouver Canucks, the Nashville Predators, the Carolina Hurricanes, the Staples Center in Los Angeles and the Fleet Center in Boston. Additionally, the company plans to announce that it has inked a deal with another major customer within the next few weeks, McAuliff said.
After acquiring its chief competitor, Season Ticket Solutions has essentially cleared the way to take a dominant position in the season ticket management space, said Randy Thrasher, a senior partner with InvestLinc and the company?s newest board member.
“There are several smaller players who are, for the most part, undercapitalized and do not have the resources these guys have,” Thrasher explained. “There?s plenty of room for a couple of players out there, but we don?t get excited about the companies ? and there are several of them ? that believe they can do this for a handful of teams. What we want to know is that they can do this across the industry, across teams, leagues and geography, like Season Ticket Solutions.”
What is more, InvestLinc decided to back Season Ticket Solutions because it has a few portfolio companies in the sports marketing and management businesses that might lend themselves to synergies down the line, he added.
When its fund-raising efforts are complete, Season Ticket Solutions plans to use the proceeds from its Series B round to continue upgrading its technology and ramping up its sales and marketing force.
Contact Robyn Kurdek: Robyn.Kurdek@tfn.com