Eventbrite is 50% fintech

Not sure how many people outside of the Wall Street analysts world saw through it, but a funny fact about Eventbrite is that they generated 50% of the revenue from their own payment processing system.

They did not state this explicitly in their S-1 form but with some simple calculations we could figure that out.

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First, with some simple calculation we could find that they generate about $3.00 per paid ticket.

We also know that they charge the event creators:

  1. $0.99 flat fee for each paid ticket

  2. Ticketing fee: 1% of the total paid ticket value

  3. Payment processing fee: 3% of the total paid ticket value

We can therefore deduce that the average paid ticket value is $50:

($3.00−$0.99)÷(1%+3%)=$50

This means that for each $50 paid ticket, they generate about $1.50 from payment processing

$50 × 3% = $1.50

which accounts for 50% of their $3.00 per paid ticket revenue.

In other words, as a ticketing startup Eventbrite only generates half of its revenue from ticketing. The other half is payment processing.

This is what allows them to have a 60% gross margin, since they perform about 90% of the transaction through their own processing system.

If they have use exclusively 3rd party payment processors and the 3% fee is redirected to those processors completely, their gross margin will be definitely under 50%, since half of the revenue is basically 0% margin.

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Yet their margin is around 60%.

This brings us to my conclusion: Evenbrite is 50% ticketing but 50% fintech.

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