Steinbach, Manitoba-based ticketing and operations software platform RocketRez has secured $20 million CAD ($15 million USD) in Series B financing from American investor Level Equity.
RocketRez caters to tours and attractions businesses, which were hit hard by the COVID-19 pandemic when travel demand fell. But RocketRez founder and CEO John Pendergrast claims that demand for the startup’s solution actually grew during this time as COVID-19 forced more industry players to embrace tech and automation.
Over the past two years, RocketRez claims it more than doubled its customer base, employee count, geographic presence, and dollars transacted through its platform.
“While it was hard and stressful, our sales kind of went through the roof because we brought to the table the things that everybody was looking for,” Pendergrast told BetaKit in an interview. “It was just really good timing.”
Over the past two years, RocketRez claims to have more than doubled its customer base, employee count, geographic presence, and the amount transacted through its platform. Amid a crowded ticketing space, RocketRez focuses specifically on mid-market firms, which helped the company see low customer churn during this time.
As other Canadian tech startups cut staff, hunker down, and scale back their expansion plans ahead of what could be a long economic downturn, RocketRez is gearing up to build on its growth. Using its Series B funding, the company plans to expand into theme parks and water parks, and grow its presence in Europe.
Founded in 2011, RocketRez helps tour and attraction operators manage all of their revenue streams through a single platform, enabling them to better understand their customers through centralized data and analytics. The startup serves boat tours and ferries, zoos and aquariums, attractions, and museums and galleries across North America and Europe.
RocketRez’s all-equity Series B funding closed in December and was funded entirely by Level Equity, a New York-based, software-focused middle-market growth capital firm. Pendergrast noted that the round included a “small” amount of secondary financing as the CEO and some employees sold shares but declined to disclose the exact amount. With this capital, RocketRez has now raised about $29 million CAD in total funding to date.
As part of the deal, Level Equity partner Charles Chen is joining RocketRez’s board. Chen, who was not made available for an interview regarding the deal, noted in a press release statement that part of what attracted the firm to RocketRez was the company’s customer acquisition and retention. “We believe in RocketRez’s vision and their high-growth potential as demonstrated by the marquee clients they’ve onboarded and retained during these challenging times,” he said.
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RocketRez’s clients include Maui Ocean Center, Xtreme Xperience, Aquarium of the Bay, Governors Island, Fossil Rim Wildlife Center, Chicago Line Cruises, and Marineland.
“Global tourist attractions that have weathered the storm have done so because they’re looking to the innovative solutions provided by RocketRez,” Chen added. “They understand that technology and data are what will power their vision for the ultimate guest experience.”
Pendergrast declined to name RocketRez’s new valuation but noted it is higher than the company’s $8.4 million 2021 Series A round. “We actually did exceptionally well compared to market trends,” said the CEO. “But markets are still what I’d consider depressed.” Heading into that prior financing, RocketRez was sitting at about $1 million in annual recurring revenue (ARR). Today, the CEO noted that the firm’s ARR is “over five times higher than that.”
During the pandemic, Pendergrast claims RocketRez only lost one or two clients due to COVID-19, in part because its customer base was large enough to stay in business and weather the storm. But the coronavirus posed other challenges for RocketRez, which invested heavily in its tech to meet the needs of companies that had cut staff and turned to RocketRez’s tech as a means of operating more efficiently.
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“The tourism space has been perennially about a decade behind other industries technologically,” said Pendergrast. For many operators in the space, COVID-19 forced a change on this front.
Unlike many other tech startups more generally and firms operating in the travel tech space specifically, Pendergrast claims RocketRez did not freeze hiring or cut staff during the pandemic. In response to COVID-19 uncertainty, the startup temporarily reduced staff salaries for a period of four months, hired conservatively, and negotiated with vendors. As market conditions have deteriorated over the past year and layoffs have swept across Canadian tech, RocketRez has been able to avoid them so far.
“We were just very fortunate throughout COVID-19 to have made the right choices going in and navigated it as we did,” said the CEO. “It was a very tough and stressful experience, but … I would argue in many senses, it was actually a net positive for us as an organization.”
Per Pendergrast, there are about 150 ticketing companies, many of which were raising capital around the same time as RocketRez. “There’s a lot of dry powder specifically focused in this industry because it’s very, very large,” he added, noting that he expects to see significant consolidation within the market over the coming years.
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Unlike Ticketmaster, which focuses on live events and has been under fire recently for its market dominance, RocketRez targets “time-ticketing and tours and attractions” like zoos, aquariums, museums, observation decks, and passenger vessels. “Market leaders in our space are not household names,” said Pendergrast.
Within the ticketing sector, the CEO said the “vast majority” of tech players operate in the “long tail space,” focusing on smaller customers with less than $500,000 in revenue. For its part, RocketRez caters to larger, mid-market players pulling in between $2 million and $100 million. In this specific segment, the company competes against firms like Accesso, Gateway Ticketing Systems, and Vivaticket.
“We figured out the formula already, now it’s just about putting rocket fuel on the fire.”
-John Pendergrast, RocketRez
According to Pendergrast, what makes RocketRez unique is that they are the only platform in the space that covers all revenue streams, providing everything from ticketing to software to run gift shops, manage inventory, and food and beverage sales. “We’re significantly further ahead technologically than most of our competitors,” claimed the CEO.
“We figured out the formula already, now it’s just about putting rocket fuel on the fire,” said Pendergrast.
RocketRez plans to invest its Series B funding in engineering and product development, as it looks to better serve its existing clients, and sales expansion targeted towards Europe. From a vertical standpoint, RocketRez wants to expand into theme parks and water parks. To get there, the startup intends to add 30 employees to its 60-person team over the next year.
Over time, Pendergrast sees room for RocketRez to expand into Australia and Oceania, as well as to move upstream and start serving larger players. “We’re a little company in Manitoba taking on the world,” he said.
Feature image courtesy RocketRez.