Fan-to-fan ticket resale startup Twickets is hoping to draw a crowd to its latest funding round, as it tries to raise £700k on equity-crowdfunding platform Seedrs.
The campaign is part of a wider funding round for the British company that involves a variety of music industry veterans, including the founders of Ignition Management, Modest! Management and Wildlife Entertainment as well as Chrysalis co-founder Chris Wright and former BPI chairman Tony Wadsworth.
The campaign is offering 6.5% of the company’s equity at a pre-money valuation of just over £10m. It comes as Twickets reveals more about its expansion plans. including a deal to become the official ticket reseller for English Premier League football club Crystal Palace, and a partnership with Spanish music promoter Doctor Music to launch in Spain.
“Our first round of funding focused on industry because we didn’t have a wide base of users at the time. This time it’s a balance of the two,” Twickets CEO Richard Davies told Music Ally ahead of the launch.
“We’ve got such a loyal base of users, we wanted to get them involved in what we do, and to help us grow. We have to demonstrate that this is a business, but one that is trying to make money in a fair and honourable way to its audience.”
Twickets originally launched in 2011 as an internal project at digital agency Future Platforms, scanning Twitter for fans trying to offload unwanted concert tickets for face-value or less, and tweeting the details to boost the chances of a successful sale.
“We wanted to be different to other ticket exchange platforms: this was going to be true fan-to-fan, at face-value or less,” said Davies.
Twickets wasn’t the first entity doing this: website Scarlet Mist was already up and running. Twickets was built to capitalise on Twitter’s growing network, however, and within a few months its account had more than 10,000 followers.
Its main flaw was that those followers saw every tweet: even for concerts by artists they weren’t interested in, playing cities too far away to consider.
The solution to that was an iPhone app in early 2013, enabling fans to filter the stream of tickets by location, genre and date. An App Store promotion brought tens of thousands more people to Twickets, which in turn spurred its team to spin out of Future Platforms into a standalone company.
“We wanted to create a business that would be sustainable, but which would stick to its principles. But it had to be a business, because otherwise it would be just us or shareholders funding it all the time,” said Davies.
There would be shareholders too, though. In March 2015 Twickets announced a board of investors drawn from the worlds of music and sport, including Wright and Wadsworth as well as Crystal Palace FC chairman Steve Parish.
Their investments helped Twickets change from what was effectively a matchmaking service for buyers and sellers into a bona-fide ticketing platform processing transactions, which meant it could protect sellers against buyers who didn’t pay, and buyers against sellers with fake tickets.
“It also meant we could charge for support. We were a Craigslist type thing before, but then it turned into… Well, I wouldn’t like to use eBay as a comparison because of their connections with StubHub, but it turned into more of a commercial product where we would take a part in the process,” said Davies.
That involved Twickets taking a 10% booking fee for every sale, covered by the buyer rather than the seller.
“From that point onwards, we’ve been able to say to the industry that we can do everything that StubHub, Viagogo, Seatwave and GetMeIn said only they could do: guarantee the purchase and protect the fan by making sure they are getting a genuine ticket,” said Davies.
“We can do all that now, but we are not ripping people off in doing it. And we’ve been able to go to the industry and be a partner, helping them to manage the reselling activity of their audience without ripping them off.”
Those partnerships have been key to Twickets growth to this point, where it claims more than 500,000 users. It has worked with artists like Mumford and Sons, Adele, One Direction and The 1975 as an official way for fans to sell unwanted tickets at face value rather than touting them, as well as around a dozen festivals.
Expansion into football came via work with English Championship side Queens Park Rangers – and now Crystal Palace – with theatre and comedy also on Twickets’ radar.
There have been some growing pains. Introducing a booking fee did cause “a bit of a backlash” according to Davies, who admitted that some of its users were uncomfortable with Twickets’ transition from a fan-matchmaking service into a commercial business.
“We had a few sleepless nights, but my view was we had to make that change if we were to grow, and I think it was the right decision to make. We’ve put huge effort into managing this and policing it: to ensuring it works properly,” he said.
“You can’t expect people not to be paid for that job. We have people moderating the tickets as they come in, and people running customer services just like any other ticketing company. We’ve got overheads. If we’re going to grow it, we can’t just do it for free. If we didn’t see the booking fee, we wouldn’t be able to invest in the business.”
That investment will also see Twickets move beyond the UK, almost always with local partners. Doctor Music in Spain is the first of those, with Davies praising its CEO Neo Sala – also an investor in the new funding round – for his vocal battle against secondary ticketing.
“He is bringing us into mainland Europe, possibly before the end of this year. And I’ve just been in New York having conversations with people there about a launch of Twickets into New York state next year. The US is so big, we’ll have to pick it off state by state,” said Davies.
About that battle against secondary ticketing, though. In the UK, Twicket is among the companies at the forefront of a new anti-secondary movement coalesced around the FanFair Alliance, which launched in July.
Davies praised the first phase of the campaign, which has focused on persuading the music industry and politicians that the secondary ticketing market is a problem that needs to be tackled.
“Next on the roadmap is to educate consumers about this too. They’ve been conned into thinking that the secondary industry is part of the industry, and that it’s acceptable behaviour,” he said.
“The second tranche of activity will be around helping them understand what’s happening when they buy a ticket on Seatwave: that it actually isn’t like buying it off Ticketmaster, even though it says ‘a Ticketmaster company’ under its logo.”
Davies said that music fans are more aware of how the secondary market works – witness complaints on social media when tickets instantly sell out for a hotly-anticipated gig, yet are widely available on secondary sites for a hefty markup.
“People are starting to understand it, but we still have a hell of a job to do. People still say to me ‘Twickets? Oh, that’s like StubHub is it?’ and I have to tell them no, it’s not like StubHub at all! We still spend a lot of time differentiating ourselves from the rest of the resale market,” he said.
“But I would say the UK is probably leading the way here in terms of an anti-secondary voice. The majority of artists are realising that it’s their fans that are being ripped off. Those fans are an artist’s lifeblood and they believe in treating them fairly.”
Davies and his team will be hoping this drive for fairness also converts into a successful crowdfunding campaign for Twickets. Perhaps some of those artists will chip in.
However, more investors means higher expectations of Twickets as a business, which will mean treading carefully as the company looks for revenue streams beyond its 10% cut of sales through its platform.
The idea of giving sellers the option to pay to make their ticket listings more prominent – think Gumtree or *whispers* eBay – is unlikely to spark much controversy. Paying to jump to the head of a “queue-based system” for popular events may need to be managed more carefully.
Primary ticketing may also be a new revenue stream for Twickets, based on experiments it has run in the last year to sell primary tickets in order to depress prices on other secondary platforms. Most recently with Massive Attack’s recent Clifton Downs gig near Bristol.
“It was a 30,000 sellout, but the band were so adamant that they were going to stop secondary, they not only appointed us as their resale channel, but they also allocated us tickets to feed on to the market in the weeks leading up to the event,” said Davies.
“We kept feeding them on at face value, and that brought down the price of those tickets on the secondary market. We did exactly the same thing a year ago with One Direction and their farewell tour.”
Davies explained that this could be a source of additional revenue for Twickets from primary ticketing, but “at the end of the chain rather than the beginning of it” so that it remains a potential partner for primary ticketing companies, not a competitor.
There is no shortage of ambition at Twickets, then, especially if the crowdfunding campaign goes well. Davies was determined to give it every chance of success.
“It sounds like an easy thing to do, but actually it’s a hell of a lot of regulatory stuff you have to go through beforehand, as well as preparation of materials. But we got there and we’re ready to go,” he said, before returning to the theme of Twickets walking the line between a cause and a business.
“We don’t want to be seen as just some ‘power to the people’ thing that an investor wouldn’t want to know about. But at the same time, this isn’t about maximising our return and getting out as fast as we can. It’s about building something we believe in.”
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