What's your business model?

110799

How does Eventbrite make money?

Eventbrite takes multiple fees out of every ticket sold on the site

Innovation series by Steven Loeb
March 29, 2014 | Comments
Short URL: http://vator.tv/n/35f6

For the overall disorganized, a club that I admit to being a member of, event planning is something that is just not going to happen.

I've got enough going on on a day to day basis. Keeping track of all the guests, who is coming, who isn'tcoming, who has paid, who still owes me... ain't nobody got time for that!

Thankfully there is Eventbrite, which allows event organizers to track the number of tickets that have been sold, as well as see the number of people attending, along with post-event details and an attendee summary report.

But how does the company make money?

Eventbrite does not cost its users anything, meaning that there are no set up fees or monthly charges. The company only makes money when an organizer sells a ticket,

When a ticket is sold, the company charges 2.5% of the ticket value, plus $0.99 per ticket, along with an additional 3.5% for credit card processing.

So, for example, if someone is selling a $50 ticket, the 2.5% and 99 cent fee, which comes to $2.24 cents, is taken out of the ticket price, as is the other 3%, which is equal $1.50. Added together, and Eventbrite would take $3.74 of that $50.

No matter how much is charged per ticket, Eventbrite caps its service fee at $9.95 per ticket. The fees and caps all convert to the same amounts in U.S. dollars no matter what currency, or country, they are sold in. 

Eventbrite gives the organizer of the event three options for how the money can be taken out of the ticket price: they can either have the money taken out of the flar ticket price, they can split the fees with the purchaser or the organizer can add those fees on top of the ticket price. Either way, Eventbrite makes the same amount of money. 

The organizer also has the option to collect money through PayPal, in which case they would not collect the additional 3%, but the organizers would be charged the Eventbrite Service Fee plus PayPal's payment processing fees. You can learn more about PayPal's service charges here.

It should also be noted that none of these fees apply to tickets that are sold to free events. 

"We don't charge a monthly fee or anything like that, and are free for free events. We like it this way because our interests are aligned with our organizers' success," a company spokesperson told me.

So what does all of that add up to?

While the company would not reveal its revenue for 2013, it did release statistics which should give us some idea of how much the company took in.

Last year, Eventbrite processed $1 billion from a total of 58 million tickets. If it took 2.5% of that $1 billion, that would be $25 million. If Eventbrite then took 99 cents of 58 million tickets, that would be another $57.4 million (that is the most it could have made; the number could be smaller if it is counting free tickets in that figure).

Added together, that is $82.4 million.

If every ticket were sold with a credit card, Eventbrite would have made an additional $30 million on top of that. Of course, we can't know if that figure it correct since some may have been sold through PayPal.

The safest thing I can say is that the maximum amount that Eventbrite could have made last year was $112.4 million.

Founded in 2006, Eventbrite has raised a total of $200 million. It's most recent funding came earlier this month, when it raised $60 million from Tiger Global Management and T. Rowe Price.

(Image source: blog.hackbrightacademy.com)


Related companies, investors and entrepreneurs

4891
Eventbrite, Inc.
Startup/Business
Description: Eventbrite is the world’s largest self-service ticketing platform, and enables people all over the world to plan, promote, and sell...

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