Ticketing company Lyte appears to have gone out of business, shutting down its website, laying off its staff and leaving a number of concert promoters unpaid for hundreds of thousands of dollars’ worth of tickets sold on the platform.
Lyte founder and chief executive Ant Taylor has resigned from the company, according to multiple sources, with an emergency board/creditors effort underway to try to identify a potential buyer that could repay the fans and promoters affected by shutdown, which one source said felt akin to being “ghosted.” Currently, the company’s website is offline and has been for days, having been replaced by an image that says “Be Back Soon,” with smaller text reading, “Our website is currently undergoing scheduled maintenance. We should be back shortly.”
Having launched the company in 2014, Taylor raised about $53 million in four major funding rounds, with his biggest investors believed to be Chamath Palihapitiya from Silicon Valley VC Social Capital and New York hedge fund manager Joseph Edelman. Neither Taylor nor representatives for Lyte responded to requests for comment.
Lyte billed itself as a fan-to-fan ticket exchange where fans could list tickets to events they couldn’t attend and ethically resell those tickets to other fans wanting to attend a concert. But Lyte’s own clients say the company’s business model had changed and that the company helped promoters scalp their high-end tickets and VIP festival tickets — quietly splitting the profits with event organizers.
It wasn’t uncommon for a major indie festival promoter to have several hundred thousand dollars’ worth of ticketing inventory listed on the Lyte system, explained one attorney representing potentially more than a $1 million in cumulative claims against Lyte. High profile clients for Lyte included Baja Beach festival, the Lost Lands festival in Ohio, Pitchfork Music Festival and Newport Folk Festival, although it’s unclear which events are owed money by Lyte.
A worse fate potentially awaits clients who signed up for Lyte’s primary ticketing platform. As recently as Sept. 9 the Lyte blog was announcing new clients for that initiative, including Digilogue Days, an October event in Brooklyn that billed itself 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, Digilogue Days’ ticketing page has the same “be back soon” message that has come to replace nearly all of Lyte’s known web footprint.
The worst-case scenario for any primary ticketing clients would be if Lyte went out of business without paying its clients any of the revenue from tickets it had sold on their behalf. For small event organizers, that could equal nearly all of an event’s revenue.
If Lyte has to file for insolvency protection, it would fall into the hands of a bankruptcy trustee to sort through the details. But attorneys for several festival clients are hoping to pull their clients’ money out of the venture before it goes into administration.
“It would be totally unacceptable if any of my clients’ money was co-mingled with Lyte’s operational funds,” said one attorney who did not wish to speak on the record. “If that happened, the board of directors will be forced to account for those funds, even if that means piercing the corporate veil and going after their ability to raise money.”