Time Out's CEO says its £1.6 million YPlan acquisition is all about selling happiness
The price was a snip considering big name investors had pumped £31 million ($37.7 million) into the startup since it was founded in 2012.
The YPlan app and website lets users search by event, area, or venue to find tickets for events like theater, concerts, and food festivals.
Speaking to Business Insider, Time Out Group CEO Julio Bruno said the acquisition of YPlan immediately accelerates what the company had already been doing in the commerce space, allowing the publisher to make more money from the events it promotes and reviews.
As far as the nature of YPlan's exit was concerned, Bruno said the startup's team should be validated that a company the size of Time Out took notice and they can now expand their idea globally.
This interview has been lightly edited for clarity and length.
Lara O'Reilly: What can you do with YPlan that you couldn't do before?
Julio Bruno: It's not that we couldn't do this ourselves, what YPlan does for us is accelerate what we had already been doing.
At our IPO [in June] we were talking about our uses of the money [we had raised]. What YPlan does and their technology in the same sector - event planning, discovery, and booking - is perfect for what we are working on.
We are bringing in fantastic talent in that space and bringing in technology that will allow us to accelerate on our own, rather than start from scratch.
Bruno: They have a very easy user interface that's very clean, very sharp, and very user friendly. By that I mean if you see an event you like, you tap once, and if you really want to buy it, you can book now - that is two clicks.
If you go to our existing commerce platform, primarily you will see that is a little bit more convoluted because we have third parties, white labels, different providers. That seamless approach YPlan has, they do it with much fewer events that Time Out. Time Out has thousands and thousands and thousands. But the simplicity of thought they have, the delivery of the product in a very nice user friendly way is important - you are showing me a lot of things, and when the time comes to choose a thing, either you cannot book it, or it becomes complicated.
The other thing they have is a very good data analytics and CRM (customer relationship management) system that we like. That is something we have been trying to develop, we have some but do not have all, and they have something that will help us with our existing data analytics.
Then the way their management, their leaders, and engineers think is what I was looking for in terms of our evolution.
They are looking at e-commerce as an end to itself so to speak. I know this is a great event, how am I going to maximize it? I know it's good, I want people to book fast and conversion is important.
Time Out has for so long been the harbinger for fantastic ideas and thoughts without thinking very much about how to book it. With them they think the other way around. They think how can I monetize? In their mind, monetization is completely aligned with the use case.
O'Reilly: If monetization was at the center, why didn't YPlan make more money? The company posted a pre-tax loss of £6.2 million last year.
Bruno: They are like any other consumer platform, consumer app, or on desktop. The difficulty they all have in general is trying to get the traffic, the audience, the eyeballs.
Normally - and I'm not just saying this about them, as I wasn't there before - normally I think a lot of companies in this space have to spend a lot of money on customer acquisition, PPC (pay-per-click), and they have to buy [search] terms. They spend a lot of money.
The tech is there, but they didn't have the whole that we have: 137 million [users] in reach. That is a big difference between a company like that and Time Out.
In their case, they had the tech, spent a lot of money on research and algorithms, but if you do not have all the traffic you need, that takes time. That's probably why last year wasn't the best for them.
I see joining Time Out is perfect for them as a continuation of their strategy and what they want to do in the space, but with a bigger audience.
O'Reilly: The last I heard, YPlan had 1.5 million users. How many users does it have now?
Bruno: As a public company, I'm not sure if that's relevant to what we were doing now, we are merging [YPlan's audience] with an audience that is so much bigger.
O'Reilly: But it'd be interesting to know how big that chasm was, between YPlan's audience and Time Out's ...
Bruno: They have built an audience. It takes a long time to build and a lot of money to build an audience. We didn't buy them because of their audience. We are going to give that [combined] audience a combination of Time Out content and event with YPlan's tech. You have to think about this all together.
O'Reilly: How long were you in discussions to buy YPlan?
Bruno: I don't know if I can disclose that. It has been quite fast. We had to take our time for due diligence and the time needed to do these things ... I would say that it was not a lot and not too little
As a public company we have to go through a lot of things to make sure board of directors are happy. To be honest, I have to say the board was very, very happy with this idea of accelerating our strategy and with our commerce side of plan. I would say it took the usual time it takes with these [acquisitions].
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Bruno: I cannot comment about those investors. For us, obviously the product was central to the deal. The board of directors and the company founder and CEO, those were the people we spoke to. We spoke to the actual representatives of the company authorized to do this deal.
O'Reilly: How do you think they feel about the deal?
Bruno: How would they feel? You should ask them. [YPlan] now has a home that will allow them to develop their strategy on much bigger, global scale. They were in London and [had an office] in Birmingham - with us now they are a global company. That's fantastic for YPlan.
For investors, I obviously don't know how they feel. It's good to have an exit, right? It's good to validate everything you have worked for - technology, people, the talent, the place, the home. We are so happy to have them on board, as they are talented people. We love them being with us and, from what we can see, they love being with us.
O'Reilly: An exit is good, but usually an exit is good when you exit for more money than was invested into the company ...
Bruno: I don't know, I myself am an angel investor in companies and sometimes you make good, sometimes you make less good. You look at your whole portfolio, not just one investment.
There are so many companies out there that are great ideas that cannot get anywhere because they don't have momentum. YPlan had enough momentum for Time Out to be interested to put an offer in.
It's important because you have companies like Time Out, as a public company, being very careful about the types of investments we do. For them to be out there and for us to be interested, that says a lot of good about them. But we, like them, understand the challenges.
Bruno: Everyone in the company is moving, including the two founders.
O'Reilly: Is the YPlan consumer-facing app staying, or is it being rebranded as a Time Out product?
Bruno: I'm not completely 100% sure yet, we will decide while we do in the transition. As we go along we will see the value of the different brands. I don't want to confuse our consumers, clearly, so we will have to have a very defined strategy.
O'Reilly: What kind of impact does YPlan bring to the bottom line?
Bruno: That's a forward looking statement I cannot give you.
We have a plan and part of that plan was to use the proceeds of the IPO to develop products and tech platforms, but also to hire people and hire faster to start building all the things we want to build. We were going to build this in 2017/18, and now we can start to build in 2018.
The impact in terms of the company? You saw the announcement, all the numbers are there. But we are now bringing on board more people, faster than we could have. It would have been difficult to hire a couple of those engineers, that takes a lot of time. To bring them in one go, all that tech and commercial operations, that's fantastic for us and will have a material impact.
The impact is both economic and from the point of view of culture. It brings product and technology to the center of Time Out.
O'Reilly: If that's the strategy, then what else do you need? What other products can we expect you to build or acquisitions can we expect you to make?
Bruno: In the last two weeks we had two Time Out Markets open - one in Shoreditch and one in Porto, to match the one in Lisbon.
That's the other side: the entertainment, and physical representation of Time Out.
Time Out is the only global brand you can read, eat, drink. We enjoy having those together, not only talking about what is best in the city, but being part of what's best in the city.
In the first six months of this year, 1.3 million people visited in Lisbon. Those are the areas we will continue to grow in: ecommerce, then rolling [the market] out to new cities - Miami, New York City, we are working on that.
O'Reilly: What's it been like transitioning from being a private company to being a public company? What's good, what isn't? What's changed, what hasn't?
Bruno: I was talking the other day with my team and said: "Have you noticed what we have done in less than a year? And we IPOd in the middle of all that."
To Time Out that has just been one more thing. I don't mean anything by that "one more thing" isn't very important. Going out there and doing a roadshow to a lot of investors and selling the company and the fantastic ideas we have that we are very passionate about has meant a lot to us and has placed even more urgency in what we have to do.
We have to reinvent ourselves to be the great brand we are and be today more than we were yesterday.
We are a global brand in the happiness business. What we sell is happiness.
When you think about Time Out, you're thinking about what to do after work with friends, or family - going to the market, for food, drink, to see an art gallery. Or just discovery in our app about what to do this weekend.
Everything we do is about happiness, that's who we are. We are peddling happiness, so we are happy.