StubHub Turned the Internet’s Most Hated Fee Into Its Ultimate Moat

Fans loathe StubHub’s fees, but their pain funds a cash‑rich, trust‑driven marketplace

Here we’re sharing with you with the conversations happening across team Maveron — including what’s now & what’s next, perspectives beyond the boardroom, and the long view on consumer shifts we believe will stick around for the years ahead.

StubHub Turned the Internet’s Most Hated Fee Into Its Ultimate Moat

Millions groan at StubHub’s service fees, yet that pain fuels one of tech’s most unbreakable business models. Having just IPO’d, StubHub’s secret isn’t explosive growth: it’s the art of building a market dominant business rooted in both customer reliance and resentment. When predicting market performance over a longer horizon, the real question for Wall Street is whether investors can learn to love a fee structure that most fans love to hate.

Turning trust into pricing power

Never underestimate pricing power. StubHub’s fees are reviled, yet sticky: they captured 20.4% of $8.68 billion in 2024 gross merchandise sales. StubHub’s S-1 admits these take rates hold “in excess of 20%” over time. With over 40 million tickets resold, it’s clear that customers will pay a premium for certainty and security. Founders shouldn’t be afraid to charge. When the product solves a customer’s biggest pain, price becomes secondary.

For this category, certainty is the moat. Buyers want guarantees their $500 Taylor Swift ticket won’t vaporize. StubHub verifies, guarantees, refunds, and supports in 33 languages, while rivals like SeatGeek and TickPick can’t replicate the full-stack experience. Trust is sticky.

And the certainty and trust they’ve built extends beyond end consumers, also drawing in ticket sellers with pro brokers analytics, pricing guidance, bulk inventory tools, and fast payouts. The data flywheel is powerful: the more you list, the more you learn, the faster you sell. Walking away means slower turnover and lower yield.

It’s clear that scale reinforces scale. With $8.7 billion gross merch sales in 2024 and $4.4 billion in the first half of 2025, StubHub is the marketplace of record. Network effects are brutal: buyers go where the tickets are, sellers go where the buyers are. Breaking that loop would require subsidizing both sides for years.

Profit swings and spending sprees

Cash flow discipline, not just revenue growth, underpins marketplace success. StubHub’s negative working capital is a model early entrepreneurs should study: customers pay upfront, while suppliers get paid later, letting StubHub earn $255 million in free cash flow last year (a 14% margin) and $161 million in the first half of 2025 (a 19% margin). This cash machine, the float, proves the value of structuring payment flows to maximize liquidity while minimizing risk, even when GAAP profits lag.

Injecting tech into an age-old industry

StubHub deliberately brought a tech-progressive approach to the ticketing category that is otherwise trapped within the confines of an incumbent industry. Yet challenges abound for Stubhub, battling for a high valuation multiple despite lagging growth (only 3.1% year-over-year in 1H 2025). The company is pegging its future growth to a large extent on direct ticketing, where it competes against deeper-pocketed LiveNation. Early signs point to the market valuing Stubhub more like LiveNation than a disruptive marketplace like Airbnb.

StubHub is also facing a tough regulatory environment. Politicians smell blood on “junk fees,” artists are lobbying to curb resales, and the #FixTheTix campaign has momentum. Founders building in harsh regulatory spaces will see tailwinds that are both out of their control and that will often entirely change what’s possible. It’s critical to lift your head up and understand what may be coming down the pipe. If you’re thinking ahead, good. A new innovator will always be on the sidelines waiting to jump into the race.

Growth and value in the road ahead

StubHub hasn’t had the warmest welcome to the markets. Its stock plunged the first four days of trading, begging the question of whether Stubhub simply waited too long to tap into the public markets. As tech reporter Annie Palmer put in CNBC: “While StubHub has failed to excite Wall Street, its struggles haven’t seeped into other deals as the tech IPO market continues to show signs of a resurgence after an extended dry spell.” Tekendra Parmar simply called it a “flop” in Inc. Bottom line: StubHub owns liquidity, it owns trust, and it prints cash off negative working capital. But it also hauls heavy debt, regulatory risk, and iron-grip governance. We’ll have to continue to ask: how much will investors pay up for a hated fee that refuses to die and a market where growth seems lagging?

1. Customers will pay for certainty, not just price.
StubHub’s entire business is built on trust: guarantees, refunds, verified tickets. Fans hate the fees but still pay because peace of mind trumps resentment. If your product resolves the customer’s deepest fear, you can charge more than you think for it — even if they complain loudly.

2. Marketplace liquidity is a moat, even when growth lags.
StubHub’s revenue only grew 3% in the first half of 2025, but it owns the market’s liquidity. Buyers go where tickets are, sellers go where buyers are. Don’t just chase top-line growth — corner the key exchange in your market.

3. Prioritize cash flow.
StubHub gets money from buyers upfront and pays sellers later. That negative working capital produced $255M in free cash flow last year despite GAAP losses. Early founders should look closely at payment terms, billing cycles, and working capital — sometimes cash mechanics matter more than revenue growth.

4. Tooling can be the stickiest moat.
Pro sellers stay on StubHub not out of loyalty, but because its analytics, pricing engines, and payout tools make them more money. If your product becomes infrastructure for your power users, they’ll stick — even if they resent your fees.

5. Scale turns into defense.
With $8.7 billion in ticket sales last year, StubHub is the default. New entrants would need to subsidize both buyers and sellers for years to catch up — a death march. Founders: once you hit density in your market, don’t just celebrate — double down, because scale compounds into defensibility.

On Chasing Outsized Opportunity

“With Pacaso, we chose to focus on an opportunity that has a large market so we could have a large impact.”

— Austin Allison, Pacaso CEO, in conversation with Morning Brew, discussing his decision to build for a $1.3 trillion market.