7 ms·

Songkick Secures Sequoia's First Ever UK Investment with a $10M B Round

53 points by cecileb 15y ago

jpdoctor 15y ago
> Something tells me there’ll be a few drinks sunk in Bar Music Hall tonight. As I've said before: The fact that people "celebrate" a funding event is really bass-ackwards when you think about it. It says that the company couldn't figure out how to grow without bringing in a bunch of financiers, who have a low hit rate (3 go north, 3 go south, 4 turn into the living dead), who provided negative 10 yr returns even with Google in the portfolio, and who take 2-3% + 20% of exit from their own investors. Definitely an excuse to drink, but not for reasons of celebration.
- gkoberger 15y ago
  Growing a company takes money. Some people can manage to bootstrap it, and those people deserve a lot of credit. However, most can't. Employees need to be paid, and going from $0 to (($100k * # employees) + office space + hosting + etc) isn't something that can normally be done fast enough. The challenge isn't to get funded. The challenge is to find a VC who can improve your valuation by more than the percentage they take. Finding that is worth celebrating.
  - jpdoctor 15y ago
    > The challenge is to find a VC who can improve your valuation by more than the percentage they take. And considering that their IRR's are negative (they're not even making money for their limiteds), which VCs would that be?
    - pg 15y ago
      You're wrong about that too. A lot of VCs don't make money but the top VCs (including Sequoia) certainly do.
      - jpdoctor 15y ago
        I had forgotten that Sequoia terminated UCal from their funds for disclosing their returns. http://www.universityofcalifornia.edu/news/article/9917 http://www.universityofcalifornia.edu/news/article/9917
    - niccolop 15y ago
      On Sequoia's Linkedin investment: "Sequoia Capital, the earliest venture capital investor, are not selling any of their stakes of 21 per cent. Sequoia had paid $4.7m for its stake, now worth some $1.5bn." Source: http://www.ft.com/cms/s/2/ded6de58-0fe4-11e1-a36b-00144feabdc0.html#ixzz1oYbXpeBd http://www.ft.com/cms/s/2/ded6de58-0fe4-11e1-a36b-00144feabd...
    - jfarmer 15y ago
      You don't know what you're talking about. Few if any of Sequoia's funds have ever had a negative IRR, as far as I recall. Their record is unparalleled, really.
      - jpdoctor 15y ago
        We look forward to your table of % returns. Edit: Sorry jfarmer, it doesn't let me reply below. As far as never having seen negative IRRs, this is old but is out in the open http://www.matrixpartners.com/site/press_detail/63/ http://www.matrixpartners.com/site/press_detail/63/
        jfarmer 15y ago
        shrug You don't have to believe me. It's no skin off my back. But as you say, you don't have access to that information. Looking at the people who have responded to this thread, I see at least three people who do. So, maybe check yourself? Wovon man nicht sprechen kann... Out of curiosity, have you ever raised outside capital before?
        jfarmer 15y ago
        Fair enough. But note that article is from 2004, and it's talking mostly about funds raised post-1999, i.e., immediately before the dot-com crash. If you were sincerely interrogating the data, you'd ask yourself how Sequoia faired relative to other funds and asset classes in that same time period. For example, did it still beat the stock market? You'd also admit that 2004 is right when the "internet sector" saw a huge upswing. Facebook (2004). YouTube (2005). Yelp (2004). Instead it's clear you're just trying to find data to prove your inane point. Anyhow, this is really pointless. Enjoy the feeling of internet vindication.
      - rdl 15y ago
        From the entrepreneur's side, or from society's, who cares? (I agree Sequoia, Benchmark, Accel, and a few others are ballers, and I'd love to someday be an LP in a few, but that's not really what we're discussing.) If a fund has a way to raise money steadily based on past reputation, market irrationality, a large collection of compromising photographs of leaders of oil producing countries, or whatever, and invests that money in a bunch of bad-investment startups but also my going-to-be-successful startup, it's a win for me and my users. And those "bad investment startups" might actually be amazing companies, producing wonderful products which make the world better -- just at a really high valuation. There is surely some price at which a good company is a bad investment. Maybe there's an argument for sustainability, but that's more over the long term. In 1999, or if you believe 2007 or now is an overpriced period for startup valuations, it still makes sense to raise VC if it will help your business, even if it doesn't make a risk-weighted great return for the VC. I don't believe this is the case now, but it's irrelevant to the argument of whether a startup should take VC.
- pg 15y ago
  And as I've said before, if you're going to say something nasty, you'd better be right. Practically all the most successful tech companies have raised outside funding. If raising money is a sign of lameness, then for some strange reason the most successful startups all seem to be the lame ones. Honestly, you should be ashamed of yourself. The Songkicks have worked hard. This is a big milestone for them. And you are pissing all over it without knowing anything about them, just because this news happened to trip some idee fixe you're in the grip of.
  - jpdoctor 15y ago
    > you'd better be right Did I get wrong 1. hit rate, 2. negative IRRs or 3. the take? > Practically all But not all.
    - pg 15y ago
      I don't know Sequoia's hit rate (and I doubt you do either) but you got 2 and 3 wrong, yes. Practically all is enough to falsify your claim.
      - jpdoctor 15y ago
        Re 1: You have not heard that saying from Sequoia? Re 2: Linked elsewhere, but again here wrt negative IRRs http://www.matrixpartners.com/site/press_detail/63/ http://www.matrixpartners.com/site/press_detail/63/ And the lawsuit ISTR that resulted from that article: http://www.universityofcalifornia.edu/news/article/9917 http://www.universityofcalifornia.edu/news/article/9917 Re 3: Please let us know the carry and take numbers.
        pg 15y ago
        The first article doesn't talk about the final returns from any Sequoia fund but merely points out one was down halfway through its 10 year life. The second does talk about final returns and says "UC investments in partnerships managed by Sequoia Capital (Funds III to X) have returned over $508 million on an investment of about $110 million for a 4.6-fold return."
- jamiequint 15y ago
  > It says that the company couldn't figure out how to grow without bringing in a bunch of financiers That is completely false. The most common reason companies raise VC money is so they can grow at a faster rate than they could without funding. If you have a business where X dollars invested in customer acquisition equals X+Y dollars in revenue but your revenue lags your customer acquisition by 6-12 months then you should go raise all the money possible given the size of the opportunity you are pursuing. Focusing on near-term profitability is not always the right decision.
- rdl 15y ago
  I don't think anyone ever argued VC funding was sufficient to be successful -- it's just nearly necessary in some stages of many businesses to do certain things. Series B investment is a lot different from "should I bootstrap or not" in the early stage. I think there are a whole lot more people who can work without salary for a year or two, and maybe dump a few hundred thousand of their own money into a business, getting it proven and to profitability, than there are people who can take a successful business, see great metrics, and decide to invest a spare $10mm in taking over the world. It's useful to argue against VC financing as a "requirement" for early stage businesses (even though it helps a lot of businesses) mainly because it removes an excuse from people who can't raise money (by being in the wrong place, whatever) starting now. There's very little point in arguing for or against Series B and later funding -- by that point, you either have a business or you don't.
johnndege 15y ago
congrats ian and team.
andreasklinger 15y ago
Congrats! Well deserved :)
rdl 15y ago
I love Songkick -- I've wished for exactly that service many times, especially since I'm willing to see ok concerts in the Bay Area, or really great shows in a few other cities, if I know about them in advance. Counting the PhDs at Songkick is interesting. Excessively smart people who are passionate about the problem domain (and luck) seems to be the only way to make up for the structural problems in the music industry.
- pg 15y ago
  Me too. Songkick is one of the startups we've funded that has affected my life most as a user. Before Songkick, Jessica and I never went to see live music, because the bands we like are kind of obscure and we'd never find out they were coming to the Bay Area till too late. But thanks to Songkick we've now been to a bunch of concerts together.
- spindritf 15y ago
  I haven't heard about Songkick before, it looks great. I wish they enabled favourite bands import from Last.fm. EDIT: And country-wide tracking, that's a bummer.
  - iaskwhy 15y ago
    It used to be possible to import from last.fm (and pandora) but, true, cannot find it anymore.
adrianwaj 15y ago
I wonder how much of SongKick's data is sourced from ArtistData: http://www.artistdata.com/us/network http://www.artistdata.com/us/network ?
jansen 15y ago
Wow, this is awesome! Always been a big fan of London-based YC startups :)
destraynor 15y ago
Delighted for the guys, I met a couple of them while I was speaking in Cambridge, smart team of fantastic and enthusiastic people. It's a really good consumer play solving a very real problem. Funding makes perfect sense for them, in my opinion. I can't work out why jpdoctor is so down on this, but each to their own.
amirmc 15y ago
Off-topic: I'm curious. If a US VC invests outside the US do they have the same tax issues getting returns back into the country as other companies? e.g. Apple etc. Or does the money never leave in the first place?
staunch 15y ago
Congrats. Since I saw it I've wished someone would do this for comedians. I don't like live music, but I love live comedy. Get on that, someone!

53 points by cecileb 15y ago

> Something tells me there’ll be a few drinks sunk in Bar Music Hall tonight. As I've said before: The fact that people "celebrate" a funding event is really bass-ackwards when you think about it. It says that the company couldn't figure out how to grow without bringing in a bunch of financiers, who have a low hit rate (3 go north, 3 go south, 4 turn into the living dead), who provided negative 10 yr returns even with Google in the portfolio, and who take 2-3% + 20% of exit from their own investors. Definitely an excuse to drink, but not for reasons of celebration.

gkoberger 15y ago
Growing a company takes money. Some people can manage to bootstrap it, and those people deserve a lot of credit. However, most can't. Employees need to be paid, and going from $0 to (($100k * # employees) + office space + hosting + etc) isn't something that can normally be done fast enough. The challenge isn't to get funded. The challenge is to find a VC who can improve your valuation by more than the percentage they take. Finding that is worth celebrating.
- jpdoctor 15y ago
  > The challenge is to find a VC who can improve your valuation by more than the percentage they take. And considering that their IRR's are negative (they're not even making money for their limiteds), which VCs would that be?
  - pg 15y ago
    You're wrong about that too. A lot of VCs don't make money but the top VCs (including Sequoia) certainly do.
    - jpdoctor 15y ago
      I had forgotten that Sequoia terminated UCal from their funds for disclosing their returns. http://www.universityofcalifornia.edu/news/article/9917 http://www.universityofcalifornia.edu/news/article/9917
  - niccolop 15y ago
    On Sequoia's Linkedin investment: "Sequoia Capital, the earliest venture capital investor, are not selling any of their stakes of 21 per cent. Sequoia had paid $4.7m for its stake, now worth some $1.5bn." Source: http://www.ft.com/cms/s/2/ded6de58-0fe4-11e1-a36b-00144feabdc0.html#ixzz1oYbXpeBd http://www.ft.com/cms/s/2/ded6de58-0fe4-11e1-a36b-00144feabd...
  - jfarmer 15y ago
    You don't know what you're talking about. Few if any of Sequoia's funds have ever had a negative IRR, as far as I recall. Their record is unparalleled, really.
    - jpdoctor 15y ago
      We look forward to your table of % returns. Edit: Sorry jfarmer, it doesn't let me reply below. As far as never having seen negative IRRs, this is old but is out in the open http://www.matrixpartners.com/site/press_detail/63/ http://www.matrixpartners.com/site/press_detail/63/
      - jfarmer 15y ago
        shrug You don't have to believe me. It's no skin off my back. But as you say, you don't have access to that information. Looking at the people who have responded to this thread, I see at least three people who do. So, maybe check yourself? Wovon man nicht sprechen kann... Out of curiosity, have you ever raised outside capital before?
      - jfarmer 15y ago
        Fair enough. But note that article is from 2004, and it's talking mostly about funds raised post-1999, i.e., immediately before the dot-com crash. If you were sincerely interrogating the data, you'd ask yourself how Sequoia faired relative to other funds and asset classes in that same time period. For example, did it still beat the stock market? You'd also admit that 2004 is right when the "internet sector" saw a huge upswing. Facebook (2004). YouTube (2005). Yelp (2004). Instead it's clear you're just trying to find data to prove your inane point. Anyhow, this is really pointless. Enjoy the feeling of internet vindication.
    - rdl 15y ago
      From the entrepreneur's side, or from society's, who cares? (I agree Sequoia, Benchmark, Accel, and a few others are ballers, and I'd love to someday be an LP in a few, but that's not really what we're discussing.) If a fund has a way to raise money steadily based on past reputation, market irrationality, a large collection of compromising photographs of leaders of oil producing countries, or whatever, and invests that money in a bunch of bad-investment startups but also my going-to-be-successful startup, it's a win for me and my users. And those "bad investment startups" might actually be amazing companies, producing wonderful products which make the world better -- just at a really high valuation. There is surely some price at which a good company is a bad investment. Maybe there's an argument for sustainability, but that's more over the long term. In 1999, or if you believe 2007 or now is an overpriced period for startup valuations, it still makes sense to raise VC if it will help your business, even if it doesn't make a risk-weighted great return for the VC. I don't believe this is the case now, but it's irrelevant to the argument of whether a startup should take VC.
pg 15y ago
And as I've said before, if you're going to say something nasty, you'd better be right. Practically all the most successful tech companies have raised outside funding. If raising money is a sign of lameness, then for some strange reason the most successful startups all seem to be the lame ones. Honestly, you should be ashamed of yourself. The Songkicks have worked hard. This is a big milestone for them. And you are pissing all over it without knowing anything about them, just because this news happened to trip some idee fixe you're in the grip of.
- jpdoctor 15y ago
  > you'd better be right Did I get wrong 1. hit rate, 2. negative IRRs or 3. the take? > Practically all But not all.
  - pg 15y ago
    I don't know Sequoia's hit rate (and I doubt you do either) but you got 2 and 3 wrong, yes. Practically all is enough to falsify your claim.
    - jpdoctor 15y ago
      Re 1: You have not heard that saying from Sequoia? Re 2: Linked elsewhere, but again here wrt negative IRRs http://www.matrixpartners.com/site/press_detail/63/ http://www.matrixpartners.com/site/press_detail/63/ And the lawsuit ISTR that resulted from that article: http://www.universityofcalifornia.edu/news/article/9917 http://www.universityofcalifornia.edu/news/article/9917 Re 3: Please let us know the carry and take numbers.
      - pg 15y ago
        The first article doesn't talk about the final returns from any Sequoia fund but merely points out one was down halfway through its 10 year life. The second does talk about final returns and says "UC investments in partnerships managed by Sequoia Capital (Funds III to X) have returned over $508 million on an investment of about $110 million for a 4.6-fold return."
jamiequint 15y ago
> It says that the company couldn't figure out how to grow without bringing in a bunch of financiers That is completely false. The most common reason companies raise VC money is so they can grow at a faster rate than they could without funding. If you have a business where X dollars invested in customer acquisition equals X+Y dollars in revenue but your revenue lags your customer acquisition by 6-12 months then you should go raise all the money possible given the size of the opportunity you are pursuing. Focusing on near-term profitability is not always the right decision.
rdl 15y ago
I don't think anyone ever argued VC funding was sufficient to be successful -- it's just nearly necessary in some stages of many businesses to do certain things. Series B investment is a lot different from "should I bootstrap or not" in the early stage. I think there are a whole lot more people who can work without salary for a year or two, and maybe dump a few hundred thousand of their own money into a business, getting it proven and to profitability, than there are people who can take a successful business, see great metrics, and decide to invest a spare $10mm in taking over the world. It's useful to argue against VC financing as a "requirement" for early stage businesses (even though it helps a lot of businesses) mainly because it removes an excuse from people who can't raise money (by being in the wrong place, whatever) starting now. There's very little point in arguing for or against Series B and later funding -- by that point, you either have a business or you don't.

johnndege 15y ago

congrats ian and team.

andreasklinger 15y ago

Congrats! Well deserved :)

rdl 15y ago

I love Songkick -- I've wished for exactly that service many times, especially since I'm willing to see ok concerts in the Bay Area, or really great shows in a few other cities, if I know about them in advance. Counting the PhDs at Songkick is interesting. Excessively smart people who are passionate about the problem domain (and luck) seems to be the only way to make up for the structural problems in the music industry.

pg 15y ago
Me too. Songkick is one of the startups we've funded that has affected my life most as a user. Before Songkick, Jessica and I never went to see live music, because the bands we like are kind of obscure and we'd never find out they were coming to the Bay Area till too late. But thanks to Songkick we've now been to a bunch of concerts together.
spindritf 15y ago
I haven't heard about Songkick before, it looks great. I wish they enabled favourite bands import from Last.fm. EDIT: And country-wide tracking, that's a bummer.
- iaskwhy 15y ago
  It used to be possible to import from last.fm (and pandora) but, true, cannot find it anymore.

adrianwaj 15y ago

I wonder how much of SongKick's data is sourced from ArtistData: http://www.artistdata.com/us/network http://www.artistdata.com/us/network ?

jansen 15y ago

Wow, this is awesome! Always been a big fan of London-based YC startups :)

destraynor 15y ago

Delighted for the guys, I met a couple of them while I was speaking in Cambridge, smart team of fantastic and enthusiastic people. It's a really good consumer play solving a very real problem. Funding makes perfect sense for them, in my opinion. I can't work out why jpdoctor is so down on this, but each to their own.

amirmc 15y ago

Off-topic: I'm curious. If a US VC invests outside the US do they have the same tax issues getting returns back into the country as other companies? e.g. Apple etc. Or does the money never leave in the first place?

staunch 15y ago

Congrats. Since I saw it I've wished someone would do this for comedians. I don't like live music, but I love live comedy. Get on that, someone!