How Cvent Emerged From Bankruptcy
Cvent founder and CEO Reggie Aggarwal has come a long way from worrying about whether he could write the company’s next rent check. We visited the event management software firm the day after its 10th earnings call to hear how things have changed since its $122.1M IPO in August 2013.
It’s hard to imagine Cvent was ever on the brink of bankruptcy. Its Tysons headquarters is buzzing with people in large open areas, on the phone, meeting inside glassed conference rooms and chatting over coffee in one of several cafeterias and lounge areas. Reggie watches it all from his own glassed-in office, front and center of the action, just a stone’s throw from the receptionist. Total revenue growth for Q3 jumped 29% to $48.4M. Platform subscription revenue grew 29% and hospitality cloud revenue increased 30%. The company is projecting total 2015 revenue to hit $187.3M, representing 32% growth over 2014. And the stock price is up over 50% from the IPO price of $21.
After years of product development and acquisitions, Cvent has the full deck of event planning cards to capture a bigger share of the $565B event market. The company’s customer base has expanded from small and midsized businesses to larger, global enterprises with regulatory compliance needs. Cvent CTO and co-founder David Quattrone says 24% of marketing budgets are going to events and meetings and nearly every industry throws some type of events.
Groups and meetings represent 30% of top-line revenue for hotels. Cvent’s hospitality cloud has become the largest marketplace in the world to find an event venue. The idea for it came from Reggie, who struggled to find a venue for his 400-person wedding in 2005. He wanted a 5-star wedding at 4-star prices but couldn’t find any non-hotel venues online. (After attending countless business events at hotels, he didn’t want his wedding to feel like another business function.) The product allows an event planner looking for a venue to plug in specific information on their upcoming event and venues bid for the business. When CSN launched in 2008, $50M worth of meeting and event RFPs were sourced through the network. In 2014, that volume has increased to $8B.
The Cvent name from the company's previous headquarters is on display in the front lobby. Reggie says being a public company has given Cvent more brand power, especially when talking to Fortune 10 companies. Some of its clients include Duke University, Autodesk, Walmart, Allstate and Amazon. The company also has the capital to acquire and expand the Cvent platform. Reggie says being public also makes the business more disciplined. “You don’t want to miss what you forecast, so it makes you look at the business more closely.” One the downside, Reggie says he can’t be as transparent as he was pre-IPO with employees.
One of Cvent’s biggest challenges is finding engineers, particularly those who understand how to develop products for the cloud that can truly scale and deliver anytime and from anywhere, says David. He’s recruiting from all over the country and competing for talent with nontraditional companies as software continues to get embedded in everything from our cars to our refrigerators. Cvent’s engineering team has grown from 100 in 2011 to 600 by the end of this year, representing a third of Cvent’s 1,750 head count.
Cvent was one of the first corporate-focused enterprise solutions on the market. But that early arrival is also why the company teetered on the brink of bankruptcy in the late '90s. A decade ago people fought using email for marketing and online registration. “We almost went bankrupt waiting for the playbook to pay out because everyone thought that it would happen in ’99, 2000, 2001. That’s why hundreds of event registration companies didn’t make it because the playbook took longer.” The lesson for Reggie: Be patient and make sure you have enough funding. By 2001, Cvent execs knew people would start to use email invitations because it’s more logical.
Reggie, 46, has been at the helm 16 years and has no plans to move on. Now as a public company, he says the business is more fun because decisions can be more strategic. Being public also comes with more responsibility to the couple of thousand families he’s feeding. Especially in the company’s India office, where over half of the employees are the prime breadwinner for not only their families but also their parents. The father of three young children says, “To me, this is a once in a lifetime opportunity to go from founding a company and then taking it public. That rarely happens with the founder.”