Ticketing company Lyte appears to have gone out of business, shutting down its website, laying off staff and leaving several concert promoters unpaid for hundreds of thousands of dollars worth of tickets sold on the platform.
Founder and CEO of Lyte Ant Taylor resigned from the company, according to multiple sources, with an emergency board/creditors effort underway to try to identify a potential buyer who could repay fans and promoters affected by the shutdown, which one source said that it looked like “imagined”. The company's website is currently offline and has been for days, having been replaced by an image that says “Be Back Soon,” with smaller text reading, “Our website is currently undergoing scheduled maintenance. You should let's be back soon.”
Having launched the company in 2014, Taylor has raised around $53 million in four major funding rounds, with its largest investors believed to be Chamath Palihapitiya from Silicon Valley VC Social Capital and the New York hedge fund manager Joseph Edelman. Neither Taylor nor Lyte representatives responded to requests for comment.
Lyte was billed as a fan ticket exchange where fans could list tickets for events they couldn't attend and ethically resell those tickets to other fans who wanted to attend a concert. But Lyte's own customers say the company's business model had changed, and that the company helped promoters sell out high-end and VIP festival tickets — quietly sharing profits with event organizers.
It wasn't unusual for a major independent festival promoter to have several hundred thousand dollars' worth of ticket inventory listed in Lyte's system, explained a lawyer representing potentially more than $1 million in cumulative claims against Lyte. High-profile clients for Lyte have included the Baja Beach festival, the Lost Lands festival in Ohio, the Pitchfork Music festival and the Newport Folk festival, although it is unclear which events Lyte is owed money for.
A worse fate likely awaits customers who signed up to Lyte's main ticketing platform. As recently as September 9, the Lyte blog was announcing new clients for this initiative, including Digilogue Days, an October event in Brooklyn billed as a meeting point for “music executives, artists, creatives, students and aspiring professionals with the tools and knowledge to shape the future of the music industry.” Today, the Digilogue Days ticketing page has the same “come back soon” message that has come to replace almost all of Lyte's known online footprint.
The worst-case scenario for any major ticketing customer would be if Lyte went out of business without paying its customers the revenue from the tickets it had sold on their behalf. For small event organizers, this could equal almost all of an event's revenue.
If Lyte has to file for bankruptcy protection, it would fall into the hands of a bankruptcy trustee to sort out the details. But lawyers for several of the festival's clients hope to pull their clients' money out of the venture before it goes into administration.
“It would be completely unacceptable if any of my clients' money was commingled with Lyte's operating funds,” said a lawyer who did not want to speak formally. “If that happens, the board will be forced to account for those funds, even if that means piercing the corporate veil and going after their ability to raise money.”
from our partners at https://www.billboard.com/pro/ticketing-company-lyte-shuts-down/