Digital Seat Media Revenue, Valuation & Funding (2024)

hey folks my guest today is cameron fowler he's the co-founder and ceo of digital seat media a real-time fan engagement technology platform connecting fans to brands sports teams and artists through qr codes and nfl technology you can follow along at digitalseat.com cameron you're ready to take it to the top absolutely all right so who who are you selling to assume you're selling to not the sports fan but rather the the sports team right yeah so we uh sell into the sports team or the venue itself uh so that we can install our digital seat tags and fans can engage with them interesting so i mean can you maybe name one or two or these like nfl stadiums or soccer stadiums or we run the gamut so a lot of collegiate stadiums so we have a partnership with learfield img we do oklahoma oklahoma state baylor washington the rose bowl but then we have some professional partners on the side like uh the oklahoma city thunder utah jazz that are both in the nba and we're having discussions we haven't announced it yet but we've got a major league baseball partner um that we're getting ready to install so we kind of cover all sports and walk me through that sales process to you know the baseball stadium what's that sound like what are they getting yeah so um it's you know baseball football basketball whenever we go in we are giving them the opportunity and saying look you can work with nine different vendors that do things you can work with a vendor that allows real-time trivia you can work with the vendor that does food delivery you can work with a vendor that provides enter to win and lead collection but with digital seat you can work with one company that does all of that and will take that load off you so um we go in there and we say let us install our digital seat tags on your armrests then you can pick and choose what modules you want to use to provide to fans for them to engage so we have 31 different modules to choose from so a team at any given point can say hey for this game i want to do an enter to win a sweepstakes giveaway um live game stats and the ability for fans to purchase tickets to the next game and nft sales and next game it might be completely different so that's really our value proposition is maximize that value from the seat so instead of just selling a ticket now you can collect revenues on food delivery on merchandise sales on nft sales things like that so just be clear there's like a qr code you would literally install in the seat fans are instructed to scan the qr code and once they do that the venue or the team controls what that founder sees on sorry what the attendee sees on that access code qrl that's correct so we program the tags down to the individual seat so the student section at um smu might have a completely different content experience than the people that are sitting in the 500 seats that's really the value because the brands now mercedes doesn't care about an eight-year-old kid that's watching a football game but they do care about the guys sitting in the 500 seat so now they can target that content very interesting okay and what i'm sure there's a massive range but on average what are these venues or sports teams paying per month or per year to use digital seat um it is a range it depends on the size you can have some smaller venues that are paying fifteen thousand dollars a year twenty thousand dollars a year and you can have some big ones that are paying six figures it depends on the number of seats and then also the number of venues so um not surprisingly you have some giant venues that might only have 10 events a year and then you have some that we're working with one right now that has a hundred and i think 20 140 a year so um it's especially if they have concerts rolling through and things of that nature well that's why i asked you how you price what utility metric you price against because you don't if you did number events well if there's only one event that's hard to price against if you do number of seats well that's interesting but what if they're not all full if you do number of attendees live at the event but then what's the frequency of the events like what's the one like god lego block you build around it's an art more than a science um really it is uh looking at the numbers because obviously even if you can't go to a stadium that that says okay we seat 80 000 we go well you only have 40 000 people here so we're only going to do 40 000 seats because maybe your team gets better maybe they get worse so we have to base it on the number of seats and then we normally start with a flat number of events and say okay we know you're going to activate for 10 if you want to increase it to 20 30 50 as you grow then you can do that but let's start here oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 interviews i've done manually saves 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the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on youtube all these datas are built from real-time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raised they sold 22 percent of their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of sas valuations than what you can get now inside of founderpath and we're thrilled to bring it to you all right we're going to go back to the youtube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your valuation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform i hope to see you there all right let's jump back into the interview so just give me just for example to make it really real for my audience i'm a 50 000 seat nfl stadium with 10 home games a year that's probably going to run me what 50 000 a year right about probably it's somewhere between 50 to 70 000 depending on what modules you're using yeah okay very interesting okay cool get put this on the timeline for me when did you guys launch the business so we met uh sullivan my co-founder and i we worked together about 13 years we came up with the idea back in 2013 2014 um because we were working on facial recognition software and consumer behavior analytics i grew up in texas big sports fan and so i said matt it's crazy that we can trigger content based on a person's face and age and gender and all this stuff but when i go to sports it's the same advertising that it's been for the last 40 years um that was in 2013. i said we can probably program something down to the armrest so you can scan it and get exclusive content so the problem was back then is that originally it was let's put nfc chips in the tags yeah and people can tap it um and let's put qr codes on top as a stop gap but way back then qr code scanning wasn't native on ios devices you still had to download an app in order to do it and so if we were going to ask them to do that you might as well ask them to download the team app um and so we waited until 2018 when when qr code scanning became natively unlocked on ios devices and on android and that's when we said hey okay we need to go and see what we can do in this market so you weren't building the tool then you weren't doing anything 2014 to 2018 you had a full-time job doing something else we were working together doing technology consulting but we we were testing tags so what we were doing was getting different printing materials learning about adhesives working with chemist and saying okay how do these tags work outside for three and four years at a time how do we get people from ripping them off so we were doing that work but yes we had a full-time job that was just in the side that we were working on this i see were you was your full-time gig working with these sports complexes so you're at least getting close to your customers not really matt and i've been very fortunate where we have gotten to work on projects that interest us so we've done things like work with intel on facial recognition software building out the event uh metric system for mary kay cosmetics with boeing on some projects um so things that came to us we worked with samsung on gesture recognition for televisions things that were interesting to us when clients would come to us and say hey we're trying to solve problem a b and c um then we'd evaluate it and say hey that looks like something that could be intriguing we'd enjoy doing so we were really kind of all over the map which really helped too because we learned a lot of course now fast forward that's 2018 fast forward to today how many individual venues are you working with today so we are about to install our 43rd 44th ish um i believe so so we've got quite a few um and now we're starting to do live events too so we'll be putting them at music festivals do you count how many individual qr codes you've installed yes absolutely i think we're we're approaching right at a million i think we've got 900 000 and some change so yeah it's uh it's a lot yeah that's a lot i mean you're not out there with like a glue gun doing everyone yourself hopefully you have a machine or something no you do them by hand um but we've learned i mean that's one of the things people are like why didn't anybody else do this i'm like because no one else is insane to go to oklahoma when it's literally 106 degrees and put on 86 000 tags in the middle of july like you just don't it keeps you in shape but it is just yeah it's insane but that's what we do we've gotten very very good at it like we did the whole rose bowl all 100 or 90 8 000 seats in i think like 10 hours so that's amazing and then can we sort it back into revenue i mean 44 venues average venues 30 40 grand a year you guys are doing north of like a million and a half of revenue at this point run rate wise yeah this year we'll be well we'll be uh right around there yeah we we really like uh because our rev model in the collegiate space um we get a percentage of sponsorships that are sold as well so yeah so we've got about 50 some odd brands from google to alaska airlines to pizza hut to starbucks that all pay to be on the platform so we i see and so what what percent are fees that the event of your revenue or venues the fees from the venues versus fees from your sponsor partners is it 50 50 or um we mainly do well yeah this year it'll probably be we'll see how this year shakes out but it'll probably be 50 50. uh it might be skewed a little bit towards the rev share side but but we need we try to do a healthy balance we mainly do license fees um straight into professional sports uh we really do the rev share on on the collegiate side of the business and if you're sort of around that 83 85 90 000 a month range today with a clear path getting like you know 110 120 by the end of the year where were you exactly one year ago just so we calculate growth one year ago we weren't barely anywhere um last year was really and we are very candid when we talked to investment funds in our investments was it zero though cameron before you tell us no no it went zero we were a couple hundred thousand dollars uh okay last year because that was my question i'm like covered no one's going to events so it was so it was we really subscribed to you right nobody nobody went to events and last year we did a lot of hey starbucks um we promise this is going to work and you're going to love it let us give it to you or let us give it to you at a discount and let's get the data and then next year you're going to come in and use it and it worked really well so that's we worked with a lot of brands we obviously collected revenue from a lot of them too but now that we have that data showing that you know we've increased sales lift for cheez-it products in stillwater oklahoma by 20 um now it's a lot easier to have those conversations and go hey you know now it's time to pay for it so yeah it's it's worked well really interesting talk to me more about the team today how many people are full-time um so we're running right now about 35 um that are that are here working core product full time uh we're shifting a lot of people that's including the people that were shifting that were part time you know four months ago that are now we've expanded enough to where they're coming on full-time how many kind of splits between do what engineers how many engineers um we've got nine full-time engineers right now okay okay so you know heavy engineering we're not super super heavy so matt is a genius whenever it comes to engineering um used to work at dell was a senior level engineer there his our vision has never been let's have 50 an engineering team of 50 or 100 people sitting around and building this stuff um we build we have senior level engineers that we hire and they work very smart um and so that's really our goal we don't want to have a massive team and tell me more uh tell me more about funding history did you guys decide to bootstrap you use customer revenue or did you raise so we uh matt and i self-funded uh for the first i don't know eight months probably raise a friends and family round then we went out and expanded that net a little bit wider um to where this last round um we've got some some outside capital from some family offices um we're finalizing around right now and that'll put us at about 11 million total raised how much was the last round that you closed uh the last round before this one was three point three point five okay and that was in 20 20 21 uh yes okay now just close it out of five closing out of five okay cool and then so so five six seven eight so what you raised two million in 2020 something like that yeah roughly between yeah right around two million interesting well between 2018 to 2020. okay fair enough fair enough and then the five million you're closing right now uh where's that money gonna go we're gonna invest it expansion uh sales is a big part of it so we're gonna bring out a couple more engineers um the sales team is we're looking to expand that now and go and attack these other verticals um such as live events and brands and agencies that's really where we're focusing in marketing we just haven't we've never done marketing for the company it's always been word of mouth and so now we're going to put some some dollars behind that and most folks in the series they are selling call you know 10 15 percent of the business are you guys going to sort of be in that same range um yeah so our model like the way that we we did so a lot of ours on a convertible note to begin with um but for for this round it's yeah it's right actually right in that range yeah yeah so you're turning like 25 a million pre-money north of that by a little bit okay okay fair enough fair enough yeah and then obviously the other 5.5 you already raised will be converting on this round as well so it's a little probably a little more dilution yeah yeah okay anything you would have changed about your funding history based off sort of looking back uh yeah i hopefully wouldn't there would have been a pandemic that came blowing through because that kind of messed things up whenever way back when when we had to do these notes um had would i have changed anything um i think i might have started some conversation with some of the funds that we're talking with now a little bit earlier but having said that it's hard to do in the middle of a pandemic when you run a live sports company you know i mean it makes it hard to go hey we promise this is a worthwhile investment when people are going well we don't know when this is going to end and we don't know when it's going to so i i would have liked to made some of those connections a little bit earlier yeah fair enough all right cameron let's wrap him here with the famous five number one favorite book um there's a book called surrounded by idiots which i really enjoy it's about talking with the people that you work with talking with investors and really learning about their point of view so i i enjoyed that number two is there a founder you're following or studying um arya manuel um i'm just really infatuated with what he's done over at endeavor um it's just been phenomenal number three what's your favorite online tool for building digital seed favorite online but probably slack as simple as that in it makes our lives so much easier especially when you're spread out i mean it just it helps a lot number four how many hours of sleep do you get every night depends on the night but generally between four to six okay and situation married single kids not single okay no kids all right never been married and how old are you married to the job yep how old are you uh 35 35 last question something you wish you knew when you were 20. something um to listen i mean to to see other people's points of view that i i don't know everything um you know surrounding myself with people that are smarter than i am um is how we've gotten to where we are digital seat launched in 2018 with a 2 million pre-seed round now serving 44 event venues they've put over almost a million individual qr codes on all these venue seats that's how they make money both from the venues paying to activate fans and also sponsors that want to reach those fans north of a million dollar run rate today hoping to continue to scale that with a five million dollar series they they're closing right now team of 35 nine engineers they look to continue to scale they made it through covet so it should be up and up from here cameron rooney for you man thanks for taking this off thanks so much i really appreciate it one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2pm central to make sure you don't miss any of that make sure you click 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