Matt Zarracina is CEO and founder of True Tickets. (Courtesy True Tickets)
Venture capital fund targets live entertainment, focusing on theater industry
Ticketing technology company True Tickets has added Randi Zuckerberg, sister of Facebook founder Mark Zuckerberg, as a strategic adviser after an investment in the 3-year-old company by Broadway Beta Ventures, a subsidiary of Zuckerberg Media.
The year-old venture capital fund seeks to invest in live entertainment content and technology, with a specific focus on the theater industry, including regional and touring theatrical production, according to Zuckerberg Media Chief Operating Officer Jim Augustine.
The exact amount of the investment was not disclosed, but Augustine said the fund, which also recently invested in Lin-Manuel Miranda’s hip-hop improv troupe Freestyle Love Supreme, invests on a scale that ranges from a few thousand to multiple millions of dollars.
The fund takes a data-driven approach to investing in an industry that has been tradition-bound but had been moving toward embracing new technologies in ticketing and other aspects of producing and putting on shows. The pandemic has accelerated such moves for a segment of the live entertainment that has been hit as hard as any in the COVID-19 age, according to Augustine and True Tickets CEO and founder Matt Zarracina.
“We founded this fund … specifically hoping to bring innovation over time to the live theatrical and Broadway markets,” Augustine said. “This is an old, established industry with ways of doing business that are thoroughly entrenched. Those can be very rational reasons why not to innovate, but it also means that there have been breakdowns in communication between the live entertainment space and the larger media markets and things that are happening in technology and telecom and elsewhere in the world. So we thought this was a nice way to enter into the market with capital to provide innovators, and those innovators can take lots of different shapes, from content producers, who obviously are deeply hurting in this moment when the content cannot be on stages, but also to the full panoply of support apparatus companies out there, in ticketing, in marketing, in brick-and-mortar theater ownership and on and on, to be able to facilitate their current businesses but also help them in the process of innovating. When we joined this we said, OK, we’re going to give this a decade … and at this point, because of the industry shift that’s happened with respect to COVID, there has been a lot more impetus for innovation, for people who are really thinking outside the box about how they can migrate their businesses into the next generation.”
True Tickets uses blockchain technology in conjunction with venues’ existing ticketing systems to facilitate contactless transactions that also give venues a detailed picture of not just who purchased tickets but also who is using them and how to contact them if the need arises, according to Zarracina.
The company last year entered into an agreement with the Shubert Organization to integrate its secure digital delivery ticketing service into targeted components of Shubert’s ticketing operation by early to mid-2021, about the time, it’s hoped, that Broadway will reopen theater doors.
“We got introduced through our participation in the Broadway Tech Accelerator,” Zarracina said, which also led to the deal with the Shubert Organization. The process of raising capital was continuing before the pandemic struck.
“The pandemic obviously did make things a little bit challenging. That said, I like to use a quote by the CEO of AudienceView, Mark Fowlie: The situation for us represents ‘an unfortunate opportunity,’” Zarracina said. “What we’re seeing is the value proposition of our service and what it provides for our clients is enhanced and has been solidified because of the pandemic. So we feel much stronger about our market position and where we are going because of things that have transpired in the last six months.”
Zarracina said having Zuckerberg and her team in True Tickets’ corner will be instrumental in helping the company transition “from a pre-revenue, pre-product market fit phase to a growth phase,” thanks to Zuckerberg Media’s expertise in the tech startup space and the live event space, not to mention the injection of capital.
Before COVID-19, True Tickets’ capabilities were viewed as a “nice to have” technology with marketing benefits that could boost ROI in the transition from physical ticketing to digital. Now, because of the health and safety aspect, clients are asking whether the company has the capacity to do 100% of the ticketing, Zarracina said.
“When it comes to our clients, our commitment is to be there for them when they need us to be there,” Zarracina said. “Whether that’s Q1, whether that’s Q3, whether that’s some point in the future, my goal is to make sure that we have an effective solution for our clients when they need us to reopen.”
Augustine said Broadway Beta Ventures “loved their thesis in paperless tickets” and the potential for the regional theater segment to connect with audiences in a more authentic, seamless way that was thoroughly verifiable.
After getting to know Zarracina, Augustine and fellow BBV managing partner Zuckerberg, who had a years-long relationship before coming together professionally to pursue a goal of “improving economic models for theater purveyors both in New York City and around the world,” decided it was time to invest, Augustine said.
Their idea was to use “a rigorous Silicon Valley approach to investment strategies in live entertainment,” he said.
They built an algorithm and put together datasets before making a few select investments to test out their approach. Two of the investments last year were in “Hadestown” and “Oklahoma!” – both of which won Tony Awards, Augustine said.
Augustine said many of the changes in the theater business wrought by the pandemic will be for the benefit of the industry, but he acknowledges the heartbreaking economic devastation that has come with it.
“I’m very hopeful that in the beginning of 2021 we’re going to see this industry come back online,” he said. “I’m very thankful to everybody that’s making sure that that’s going to be happening safely and I’m very hopeful that the changes that come through are going to be for the benefit of the industry for a long time to come.”