Digital Seat Media Revenue, Valuation & Funding (2024)

[00:00] 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 NFC technology. You can follow along at digitalseat.com. Cameron, you ready to take us to the top? [00:15] >> Absolutely. [00:16] Alright. So who who are you selling to? Assume you're selling to not the sports fan, but rather the the sports team. [00:22] >> Right. Yeah. So we, sell into the sports team or the venue itself, so that we can install our digital seat tags and fans can engage with them. [00:30] Interesting. So, I mean, can you maybe name one or two? Are these, like, NFL stadiums or soccer stadiums? Or [00:35] >> 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, the Oklahoma City Thunder, Utah Jazz that are both in in the NBA, and we're having discussions. We haven't announced it yet, but we've got an a Major League Baseball partner, that we're getting ready to install. So we kinda cover [00:56] >> all sports. [00:57] And walk me through that sales process to, you know, the baseball stadium. What's that sound like? What are they getting? [01:03] >> Yeah. So at, 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 a 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, [01:24] >> and we'll take that load off you. So we go in there and we say, let us install our Digital Seat tags on your armrest. Then you can pick and choose what modules you wanna 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, live game stats, and [01:44] >> the ability for fans to purchase tickets to the next game and NFT sales. The next game, it might be completely different. So we 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. [02:03] So just to be clear, there's like a QR code you would literally install on 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 URL? [02:17] >> That's correct. So we program the tags down to the individual seat. So the student section at, 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 guy sitting in the $500 seat. So now they can target that content. [02:38] 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? [02:46] >> It is a range. It depends on the size. You can have some smaller venues that are paying $15,000 a year, $20,000 a year, and you can have some big ones that are paying 6 figures. It depends on the number of seats and then also the number of venues. So, not surprisingly, you have some giant venues that might only have 10 events a year. And then you have some that we are working with one right now that [03:05] >> has a 100 and, I think, twenty, hundred and forty a year. So it's especially if they have concerts rolling through and and things of that nature. [03:12] Well, that's why I asked you how you price, what utility metric you price against because you don't if you do number of 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? [03:21] >> If you [03:21] do number of attendees live at the event, but then what's the frequency of the event? So, like, what's the one, like, odd Lego block you bill around? [03:29] >> It's an art more than a science, really. It is 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 gonna 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 [03:49] >> say, okay. We know you're gonna activate for 10. If you want to increase it to twenty, thirty, 50 as you grow, then you can do that. But let let's start here. [03:58] Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 interviews I've done manually. Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect [04:21] your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna [04:46] get a different valuation. A VC is gonna pay a different valuation. Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here, Right? So the teal is what a VC would pay. Yellow is what private equity and red is if you sold the whole thing outright. Now what's cool about this is this is [05:08] 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, 1,200,000 seed round, 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna 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 [05:33] going out right now and you're raising your seed round. We'll 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 dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. All right, We're gonna go back to the YouTube video here in a second, but [05:55] if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. 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. Alright. Let's jump back into [06:21] 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 gonna run me what? 50,000 a year? [06:34] >> Right about. Probably, it's somewhere between 50 to 70,000 depending on what modules you're using. Yeah. [06:39] Okay. Very interesting. Okay. Cool. Get put this on a timeline for me. When did you guys launch the business? [06:44] >> So Matt Sullivan, my cofounder, and I. We worked together about thirteen years. We came up with the idea back in 2013, 2014 because we were working on facial recognition software and 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 [07:07] >> that it's been for the last forty years. 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. Yep. And people can tap it. And 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. [07:30] >> You still had to download an app in order to do it. And so if we were gonna ask them to do that, you might as well ask them to download the team app. And so we waited until 2018 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 and see what we can do in this market. So 2018 [07:48] You weren't building the tool then. You weren't doing anything 2014 to 2018. You had a full time job doing something else. [07:53] >> 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 chemists, 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're working on this. [08:14] I see. And were you. Was your full time gig working with these sports complexes so you're at least getting close to your customers? [08:20] >> Not really. Matt and I have 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 events metric system for Mary Kay Cosmetics. We worked with Boeing on some projects. 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 [08:44] >> trying to solve problem a, b, and c. Mhmm. Then we'd evaluate it and say, hey. That looks like something that that could be intriguing we'd enjoy doing. So we were really kinda all over the map, which really helped too because we learned a lot. [08:56] Mhmm. Of course. Now fast forward that's 2018. Fast forward to today. How many individual venues are you working with today? [09:02] >> So we are about to install our forty third, forty fourth ish, I believe. So so we've got quite a few. And now we're starting to do live events too. So we'll be putting them at music festivals and [09:13] Do you count how many individual QR codes you've installed? [09:16] >> Yes. Absolutely. I think we're we're approaching right at a million. I think we've got 900,000 and and some change. So, yeah, it's a it's big [09:26] Yeah. It's a lot. Yeah. Mean, you're not out there with, like, a glue gun doing everyone yourself. Hopefully, you have a machine or something. [09:31] >> No. You do them by hand. 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 a 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 [09:50] >> it. Like, we did the whole Rose Bowl all 100 or 98,000 seats in, think, like, ten hours. [09:55] So we got That's amazing. And then can we sort of back into revenue? I mean, 44 venues, average venue, $30 to $40 grand a year. You guys are doing north of a million and a half of revenue at this point run rate wise. [10:05] >> Yeah. This year, we'll be well, we'll be ahead of this. Yeah. We we really like because our rev model in the collegiate space, we get a percentage of sponsorships that are sold as well. Oh. So if 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 [10:27] I see. Too. And so what what percent are fees that the of your revenue are venues the fees from the venues versus fees from your sponsor partners? Is it fifty fifty? Or [10:37] >> We mainly do well, yeah, this year, it'll probably be we'll see how this year shakes out, but it'll probably be fifty fifty. Might may 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 straight into professional sports. Nice. We really do the rev share on on the collegiate side of the business. [10:57] And if you're sort of around that $83, $85, $90,000 a month range today with a clear path to getting, like, you know, $110, $120,000 by the end of the year, where were you exactly one year ago just so we calculate growth? [11:07] >> One year ago, we weren't barely anywhere. Last year was really and we are very candid when we talk to investment funds and our our investment [11:15] Was it zero though, Cameron, before you tell [11:16] >> us what you're No. Wasn't zero. We were a couple hundred thousand. Okay. Last year. [11:20] >> Because That was my question. [11:21] I'm like, COVID, no one's going to events. So what was that like? [11:24] >> So it was we really subscribed to you. Right? Nobody nobody went to events. And last year, we did a lot of, hey, Starbucks. We promise this is gonna work, and you're gonna love 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 gonna come in and use it. And it worked really well. So that's we worked with a of brands. We [11:43] >> 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%. Now it's a lot easier to have those conversations and go, hey. You know, now it's time to to pay for it. So it's it's worked well. [12:00] Really interesting. Talk to me more about the team today. How many people are full time? [12:04] >> So we're running right now about 35 that are that are here working core product full time. We're shifting a lot of people. That's including the people that we're 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. [12:18] How many engineers? [12:19] >> Split between do what? [12:21] Engineers. How many engineers? [12:23] >> We've got nine full time engineers right now. [12:26] Okay. Okay. So, you know, heavy engineering, we're not super super heavy. [12:30] >> So Matt is a genius whenever it comes to engineering. Used to work at Dell. He was a senior level engineer there. His our vision has never been, let's have 50 an engineering team of 50 or a 100 people sitting around and building this stuff. We build we have senior level engineers that we hire, and they work very smart. And so that's really our goal. We don't wanna have a massive team if if we can afford it. [12:52] And tell me more tell me more about funding history. Did you guys decide to bootstrap, use customer revenue, or did you raise? [12:57] >> So we Matt and I self funded 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 to where this last round, we've got some some outside capital from some family offices. We're fin finalizing a round right now, and that'll put us at about 11,000,000 total raised. [13:18] How much was the last round that you closed? [13:21] >> The last round before this one was $3.5. [13:25] Okay. And that was in twenty twenty twenty one? [13:27] >> Yes. [13:28] >> Okay. And now we're closing out of five. [13:30] Closing out of five. Okay. Cool. And then so what? Raised 2,000,000 in 2020, something like that? [13:37] >> Yeah. Roughly between yeah. Right right around 2,000,000. Interesting. Between well, between 2018 to 2020. [13:42] Okay. Fair enough. Fair enough. And then the 5,000,000 you're closing right now, where's that money gonna go? Where are gonna invest it? [13:49] >> Expansion. Sales is a big part of it. So we're gonna bring on to a couple more engineers. The sales team is we're looking to expand that now and go and attack these other verticals 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. We it's always been word-of-mouth. And so now we're gonna put some some dollars behind that. [14:10] Mhmm. And most folks in the series A are selling, call it, you know, 15% of the business. Are you guys gonna sort of be in that same range? [14:19] >> Yeah. So our model, like, the way that we we did sell a lot of ours on a convertible note to begin with. But for for this round, it's yeah. It's right, actually, in that range. [14:29] Yeah. Yeah. Yeah. So you're at like a 25,000,000 pre money [14:32] >> A little bit north of that by a little bit. [14:34] 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? [14:46] >> Yeah. I hopefully wouldn't have there wouldn't 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. Had would I have changed anything? 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 [15:06] >> sports company. You 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 gonna end, and we don't know when it's gonna so I would've liked to make some of those connections a little bit earlier. [15:18] Yeah. Fair enough. Alright, Cameron. Let's wrap up here with the famous five. Number one, favorite book. [15:22] >> 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. [15:34] Number two, is there a founder you're following or studying? [15:39] >> Ari Emanuel. I'm just really infatuated with what he's done over at Endeavor. Yep. It's just been phenomenal. [15:46] Number three, what's your favorite online tool for building Digital Seat? [15:50] >> Favorite online? Probably Slack. As simple as that end. It makes our lives so much easier, especially when you're spread out. I mean, it just it helps a lot. [15:58] Number four, how many hours of sleep do you get every night? [16:01] >> Depends on the night, but generally between four to six. [16:04] >> Okay. [16:05] And situation, married, single, kids? [16:07] >> Single. [16:08] Okay. No kids. Alright. [16:09] >> Never been married. [16:10] And how old are you? [16:11] >> Married at the job. [16:13] Yep. How old are you? [16:15] >> 35. [16:16] >> 35. [16:17] Last question. Something you wish you knew when you were 20. [16:20] >> Something [16:23] >> to listen. I mean, to to see other people's points of view that I I don't know everything. You know, surrounding myself with people that are smarter than I am is how we've gotten to where we are. I Guys, did a little bit earlier. [16:35] Digital Seat launched in 2018 with a 2,000,000 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 wanna reach those fans. North of a million dollar run rate today, hoping to continue to scale that with a $5,000,000 series a they're closing right now. Team of 35, nine engineers, they [16:58] look to continue to scale. They made it through COVID, so it should be up and up from here. Cameron, we're rooting for you, man. Thanks for taking us to the top. [17:03] >> Thanks so much. I really appreciate it. [17:06] One more thing before you go. We have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. 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 [17:32] 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 the subscribe button below here on YouTube, the big red button, and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a big [17:54] fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you wanna take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign up [18:16] for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode and if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people. We [18:35] got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright, I'll be in the comments. See you.