Ian Hogarth says that people who use Songkick go to twice as many shows a year. “That’s twice as many awesome nights out with friends, twice as much money in the pockets of hardworking bands, twice as much footfall for venues and festivals,” the cofounder explained. Sounds great, but is that worth a $10 million investment round?
Apparently it is to Sequoia Capital, which just dropped that figure on the London-based Songkick. Which brings the total funding level to roughly $17 million, and now creates tremendous pressure to generate a gigantic multiple. And, even more pressure to build this concert recommendation system into a serious revenue generator, enterprise-level company, acquisition, or all three. First-round investors include Y Combinator, SoftTech, Index Ventures, and the Accelerator Group, alongside angels like Alex Zubillaga.
This transforms Songkick overnight, and it’s not all good. It’s funny: I’m now plugged into Songkick through Spotify, another wildly-overinvested company. But it doesn’t have to be $200-plus million: Songkick could easily join the class of overvalued, hard-to-sell startups in music right now. Startups like Next Big Sound and Topspin, for example, both of whom are sizzling on the sexiness scale, but difficult to properly monetize, scale, and sell at the kinds of multiples that investors demand.
And there’s another huge problem with this picture: Live Nation. And at this stage, it’s hard to say how this plays out: currently, Songkick is shuttling referrals to Ticketmaster, alongside other providers like Eventbrite, for example. So right now, Ticketmaster is a ‘partner,’ except for this part:
“One of our ticketing partners, Ticketmaster is the biggest brand in concerts, but despite having such a huge slice of the concert industry, my back of the napkin estimate puts them at around 15 million monthly unique visitors for concerts,” Hogarth explained. “That’s a pretty small sliver of everyone out there connected to the internet.”
Which sort of looks like a standoff waiting to happen. Live Nation Labs is currently wrapping its head around ticketmaster.com (and livenation.com), to transform something transactional into something far more connected to fans. And potentially something devastatingly competitive and uncooperative.