Twelve years and two major pivots in, Kitchener-Waterloo-based Hive believes it has found the scale and the partner to take its marketing platform for live events to the next level.
Hive announced $27 million USD (nearly $38 million CAD) in equity Series B financing today from Charlotte, North Carolina-based Frontier Growth.
The vast majority of that amount consisted of secondary capital used to all but buy out Hive’s first institutional investor, Washington, DC’s Avenue Growth Partners, which led its $7-million USD Series A in 2023.
“We continue to chug along, but now we get to do it with somebody who’s seen companies our size go to the next level [many] times.”
While this Series B financing also includes a small portion of primary capital to help fuel Hive’s product development and go-to-market plans, co-founder and CTO Patrick Hannigan told BetaKit in an interview that for Hive, which has been hovering around breakeven for years now, the primary motivation was to team up with Frontier given its long track record supporting scaling vertical software companies and experience in live events.
“This isn’t a venture investment,” Hannigan said. “This isn’t the, ‘Oh I hope there’s [a] 100x kind of opportunity [bet].’ This is a sustainable, intentionally-built business … We continue to chug along, but now we get to do it with somebody who’s seen companies our size go to the next level [many] times.”
Frontier founding partner Andrew Lindner, who is joining Hive’s board, said in a statement that Hive has achieved “something rare in vertical software.”
“The team has built a product that is deeply embedded in its customers’ revenue, then compounded that advantage with proprietary data and network effects,” Lindner added. “The live events market is large, underserved by generic tools, and moving quickly toward automation. Hive is positioned to lead that shift.”
While Hive has raised about $35 million USD to date, most of that has been secondary. Hannigan declined to share the exact breakdown or Hive’s latest valuation.
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Hive offers what Hannigan has described as a Mailchimp specifically for venue owners and live event promoters. Its software helps clients, from big arenas in major cities to tiny bars in the middle of nowhere, connect often disparate fan purchase data with email, text, advertising, and customer relationship management tools so they can automate core marketing tasks using AI. The goal is simple: to help them better understand their audience and sell more tickets.
Today, the 75-person startup serves over 1,600 venues, promoters, and festivals, providing a sticky, revenue-generating “communication engine” that has helped those clients sell more than $1 billion USD worth of tickets to date. Hannigan claimed that the company is now “well past” $10 million USD in annual recurring revenue.
That journey began in 2014 when Hannigan and Hive co-founder and CEO Ian Roberts, a pair of students in a University of Waterloo computer lab with a passion for live music, launched the company as a ticketing business.
That year, Hive gained acceptance to the school’s Velocity incubator as well as Silicon Valley accelerator Y Combinator (YC), and raised a $750,000 USD seed round from YC, small funds, and angels as it embarked on a series of pivots. Over the intervening years, Hive tried a number of different kicks at the can as it struggled to raise money, including an attempt at building engagement and analytics tools for musicians, before finally finding product-market fit around 2019 with marketing software for music venue owners.
Hannigan credits Hive’s staying power to those Canadian roots.
When the COVID-19 pandemic hit the following year, Hive lost 60 percent of its revenue almost overnight. Hannigan said the then eight-person startup decided to stay the course “because we were scrappy Canadians.”
Roberts told BetaKit over email that the pair believed in what they were building, wanted to support its clients during this time, were bullish that live events would recover, and were profitable enough leading into this period to avoid any layoffs.
“We just kind of kept the lights on and pushed through,” the CTO added. “And once the industry consolidated and popped back … we were on this really interesting growth trajectory.”
While most of Hive’s customers are based in the US, 70 percent of its team, including most of the company’s engineering staff, is located in Canada. Hannigan credits the company’s staying power to those Canadian roots.
“I think we’re grittier than [other] people,” he said. “We last longer than [other] people. We’re more efficient than other people.”
Feature image courtesy Hive.