The 3 reasons we invested in Festicket and the future of experience travel
We recently announced our latest addition to Beringea’s UK portfolio: Festicket, the leading international platform for festival tourism and experiences. Our UK funds led a $10.5m Series D funding round alongside an exceptional roster of new and existing investors including the mobility and travel specialist, InMotion Ventures, and Channel 4’s commercial growth fund, Lepe Partners, U-Start and ex Spinnin’ Records CEO Eelko Van Kooten.
We see few businesses that bring together such remarkable talent, product and vision, so here are a few of our thoughts on what got us excited about this opportunity.
- The experience economy and the rise of festival tourism
Materialism is dead — for millennials at least. A shift towards sharing and renting more and owning less has been intensified by a desire to be a part of real experiences — filtered for perfection — shared by friends, families, and celebrities across Instagram and Snapchat. The end result is that millennials are increasingly buying into experiences at the expense of material possessions.
Euromonitor estimates that the total expenditure on the global experience economy will reach $8.2tn by 2028. In no small part, this is due to the fact that three-quarters of millennials would prefer to spend their money on an experience or event rather than an item or possession, according to a survey of 2,000 millennials by Ipsos.
At the same time, the music industry has reacted to the rise of streaming and the decline of album sales by focusing its efforts on live performances. For global artists and labels, festivals have become a cornerstone of their revenues.
These two trends mean festivals are more popular than ever before — in 2016, 30m people attended music festivals in the UK and individual festivals such as Rock in Rio in Brazil and Summerfest in Wisconsin, USA, attracted around 750,000 fans in the same year. As a result, iconic destination festivals such as Coachella and Tomorrowland have cemented the festival tourism trend, attracting hundreds of thousands of millennials — and old people like me — travelling from around the world and willing to spend big on seeing world-renowned acts.
This increase in music tourism has already had a substantial impact on the UK economy and continues to show encouraging growth. UK Music, the trade body, estimated last year that the total direct and indirect spend generated by music tourism contributed £4bn in 2016, almost double the figure in 2012.
All of these factors have driven the value of the festival ticketing market alone in Europe, North America, Latin America and Asia to more than €5bn annually.
Since Festicket provides an entire festival experience including travel, accommodation and other essentials, its addressable market is far larger. For every pound spent on a single festival ticket, there are at least three more pounds in related spend, bringing Festicket’s true addressable market to over €10bn and enabling more than 2.5m people worldwide to tap into this future of festival tourism.
2. One platform, thousands of festivals, thousands of trusted providers
While not immediately obvious, Festicket is a three-sided marketplace consisting of: consumers; festivals; and other service providers for travel, accommodation and other festival-related products. These marketplaces are notoriously hard to build due to the chicken-and-egg problem (how do I build supply without demand?), but once operating at scale, marketplaces enjoy huge network effects, making them incredibly valuable.
What follows is a brief explanation of the model that Festicket has used to create efficient supply and demand at scale.
Demand for festivals: the popularity of festivals has skyrocketed in recent years. And yet, the online infrastructure that underpins the festival industry has largely failed to keep pace. The likes of Eventbrite and Ticketmaster have become part of the backbone of music events, but they tend to provide consumers with little more than a practical ticket buying tool.
What these ticketing platforms fail to address are critical questions that face festival-goers: which festival(s) should I go to; how do I get there; where do I stay; and how do I make sure that I have everything I need to make it an incredible experience?
Zack Sabban, the CEO and co-founder of Festicket, encountered all of these logistical headaches when he took a year out from his career to travel to 45 music festivals throughout the world. Festivals were hard to find, as were transport and accommodation services that he knew he could trust.
Festicket approached the demand side by creating the largest and most active festival content platform. The Festicket Magazine is full of news and features on this year’s leading artists and festivals — as a result, it has more than 3 million monthly visitors and has become “the” go-to sites for festival fans.
The rest of the site seamlessly enables searching by acts and by countries to find new festivals, while a pioneering partnership with Spotify has led to the “Festival Finder” — a clever tool that enables Spotify users to find the festivals that best match their listening tastes. Together, content and technology unlock a world of discovery for festival fanatics.
Supply of festivals — not everyone is Glastonbury: There are a handful of well-known festivals that sell out within minutes, year in, year out. And yet, these festivals — the likes of Tomorrowland, Coachella and Glastonbury — represent a tiny fraction of the overall festival market.
For the remainder of festivals that do not sell out instantly, sales and marketing are a constant battle every year that eats into the time and expense of putting on exceptional events.
With over 2.5m festival-goers registered to the Festicket community, partner festivals– can tap into a highly-engaged network global travellers, adventurers and live music lovers. This has enabled it to build a growing network of over 1,200 festivals across Europe and increasingly North America.
These festivals want to create the best possible experience for guests, but travel and accommodation, which form a fundamental part of the festival experience, are not usually a core skill for a festival organiser. This is where the third tenet of the marketplace comes into play:
Supply of providers: the third part of the market is comprised of service providers, who create significant value for both the festival-goers and the festival organisers while benefiting themselves from increased and predictable revenues from Festicket users.
For everything from transport, such as buses to the event, to accommodation, such as hotels, tents or glamping, and insurance, are all covered on the Festicket platform.
This network of providers that the company has selected as trusted partners totals more than 4,500 suppliers already, with substantial work going into building and servicing it, instantly removing the painstaking research required to find a safe and straight-forward path to your festival.
Festicket, therefore, appears a single, seamless platform, yet it is a carefully and expertly constructed marketplace that enables the discovery of thousands of festivals and thousands of providers and partners that create your travel experience.
3. The talent to build a global community
Festicket has already enabled millions of people to find and travel to festivals across Europe and North America. Our investment, however, will enable it to strengthen its coverage of festivals in these regions and tap into new markets with new experiences for festival-goers.
Building a global brand is challenging and requires exceptional leadership. In the founders and senior team at Festicket, there is a level of talent that we do not always see at this stage of the entrepreneurial journey, as Zack and his co-founder Jonathan Younes (Chief Product Officer) have built a management team with extensive experience in travel, entertainment and ticketing.
Matt Ephgrave, COO, was previously managing director at Seatwave (acquired by Ticketmaster in 2015). Matt Hann, CFO, held various roles at Channel 4 including Head of Commercial Finance before joining Festicket, while Marie Traill joined as CMO earlier this year, having previously worked in senior marketing positions at Secret Escapes and carwow.
The business is also advised by Arthur Kosten, the CMO of booking.com from 2003–2012, and Jean-Charles Carre, the business partner and manager of David Guetta, while I am joined on the board by Ben Leaver, the Chief Operating Officer of Treatwell, the successful health and beauty marketplace, representing the existing investor, Lepe Partners.
The impressive experience, expertise and leadership of this senior team and market-leading product give us at Beringea confidence that Festicket is perfectly poised to achieve significant further growth by opening up festivals in every corner of the world to a global community of travellers.
