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We have previously reported enthusiastically about iTech Capital acquiring MDTZK (Moscow Theatre and Shows Ticket Offices Direction) – the oldest ticket retail chain in Moscow with 130 outlets. Our enthusiasm was caused by the fact that instead of investing in a mobile ticket app startup without a scale or supplier base, the Russian venture fund made a bold move in buying a traditional brick-and-mortar business for $16 million with plans, we speculated, to build the online / mobile interface on top of the well-developed business model.
As it happens, today iTech announced that MDTZK becomes a part of the newly-built ticketing company Ticketland, where the fund invested another $10 million to help it grow into the largest event ticketing company in Eastern Europe. Ticketland is essentially a merger of United Art Tickets – the supplier of entertainment tickets as well as ERP platforms for event venues, a sport ticketing processing organization Arena Group, and the said MDTZK.
The consolidated numbers look as follows: 2 million tickets for 40000 events are marketed through the newly created group, which employs 400+ people. The combined turnover exceeded $120 million in 2013, and its business model is based on the 10 percent commission from ticket sales aside from ERP solutions that are sold differently.
Interestingly, the core strategy of the company is to roll out e-tickets which currently account for 15 percent of the total turnover. What’s more, according to the CEO of Ticketland Vitaly Vinogradov, the company intends to grow revenues through applying big data to marketing initiatives.
So far Ticketland implemented eticketing at 120 venues in Moscow, plus its ERP system is installed at 90 venues that help improve venue capacity utilization.
iTech Capital on the other hand, has already backed cloud-based online marketing platform SeoPult, online ad agency iContext and contextual ad management service Garpun. Therefore as a whole group, iTech and its investees have a wealth of know-how that would most certainly help boost growth of Ticketland and other portfolio businesses.
This deal looks to me less like a VC funding, and more like a private equity investment, where internet and mobile technologies are applied to generate synergies and economies of scale for the PE firm. If this is where the VC industry is going to, the deals will be more complex, more interesting, and so will blogging… at least for me.
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