Meetings technology firm Cvent last month finalized the
first two acquisitions in its 13-year history, and both were of mobile app
developers. Cvent first bought Seed Labs, a developer of apps for music
festivals, sports events and other consumer events, for $4.2 million and
renamed it CrowdTorch. A week later, Cvent acquired CrowdCompass, another event app developer, for $10
million. Cvent founder and CEO Reggie Aggarwal between the acquisition
announcements spoke with BTN's Chris Davis about the company's expanding field
of business, its plans for additional acquisitions and the potential effect of
new U.S. federal regulations on demand for meetings. An edited transcript
After 13 years with no acquisitions, why go this route now?
We know that everything's moving to mobile. If you look at the demographics of who goes to meetings and events, they tend to have smartphones or iPads. There's high penetration, and they're using them at events or concerts or conferences. It's compelling to use it. It just makes sense that the market is moving toward there. Our core business has always been online attendee registration and some other areas, but Cvent wasn't used during the event. What I love about mobile is that it keeps the interaction before, during and after the event. That's a critical thing.
We also wanted to move into consumer events. There are a lot of similarities and synergies there. It makes sense to buy the market leader in that space as opposed to building it, because they spent three years building a great product.
How long have you looked at the consumer events market?
We've been doing some consumer events. It's not our core, but we have done some, and we learned that that there's a lot of synergy. Looking at the needs of business events and consumer events, you could say there's a 60 percent to 70 percent overlap. They don't need agendas there, but they certainly need to send out marketing communications and register people. We've been doing some of these things for years, but now we're focusing on it, putting real money into it and trying to hire experts.
How does this affect plans for in-house Cvent app development?
Yes, we are still having it. Number one, you can never hire enough mobile developers. Number two, we have other products that we're going to, and this is not a word, "mobilify." We have our survey tool and our Supplier Network tool, and we're building the ability to make them more friendly through mobile devices. As an example, with our Supplier Network tool, [hotel] national sales organizations want to check requests for proposals and respond to them; planners on the road want to see RFP responses. All our tools are going to have to become mobile-friendly. For event registration, we've already done that. But our next steps are to build our survey and our Supplier Network and other tools. We have people here, and we're going to continue to hire people here in our corporate office in McLean, Va.
Would these developments be in the form of downloadable apps or HTML5 mobile websites?
Right now, our view is that the downloadable app is clearly better. You can always access it. You go to a convention center, and you can't get to the Internet half the time. People argue that you can cache the website, but have you ever tried to use one when you're not connected? It's not as easy as an app, as long as you have power. Our view is that apps are what customers are asking for. Having said that, when the technology gets better and HTML is something that's preferred, then we'll be there as well. But we've talked to hundreds of customers, and very few of them prefer HTML5. It's usually the vendor that's pushing it. We do offer both, but we know what experience is going to be better.
Were going to continue to do acquisitions in strategic areas. First of all, we can't be something to everyone, and we can't necessarily become the market leader in innovation in all product lines. Take the consumer side: What excited us is that this is an interesting area that we think will be a growth area that we want to get into, but we don't know it super-well. These guys do. We've looked at over 20 mobile companies. We have the ability to find innovative products with good management teams, and we're going to find the best.
We're now almost 1,000 employees, and when that happens you lose a little entrepreneurialism. It's quite different than when you're a 30-person company. We don't want to lose it, and we do a lot of things to make sure we maintain it, but by buying some of these companies, it infuses a bit of entrepreneurial spirit back into the company, because you remember what it's like to be a startup.
Are the areas you're looking now for acquisitions an extension of the move into the consumer side and mobile?
We're going to continue to do acquisitions in critical areas that make sense. Consumer is one area we'll focus on, but we're also going to continue to focus on B-to-B stuff. We will buy applications for B-to-B because that is our core competency, and there's a lot of innovative products out there that we could use to benefit our customers.
How do you assess the current B-to-B marketplace?
You're seeing a little bit of maturity in the market, and you're seeing market leaders emerge. Certainly for global organizations, it's becoming more clear that there are fewer players to choose from. You need to have a certain size to support a global client. It's good for us in that we're differentiating from our competitors on our products, our size and our ability to execute on a global level. I think that's a massive shift.
Has the entry of The Active Network into the market via the acquisition of StarCite changed Cvent's strategy?
StarCite is a worthy competitor. There are always pros and cons of combining two companies, and our view is that Active is a good company and StarCite is a good company, and it changes the landscape somewhat. I do think they are clearly one of the market leaders, and we continue to see them on deals. But it's good to have several competitors. I don't know if it was healthy to have as many competitors as there were before, when there were hundreds of registration companies.
How do you see demand?
We see a lot of it. We're hiring 200 people this year, net, not including replacements or the acquisition. A lot of those people are being dedicated to our Global 2,000 customers.
Can you differentiate between corporate, association and government in terms of how you see demand?
We think all three markets are strong. In the corporate market, even though there are obviously a lot of headwinds in the market, the reality is that people are moving toward technology. Those headwinds are sometimes beneficial to us, because it forces people to think of ways to save money and to be efficient and cost-effective, and technology certainly is the number-one way to do that.
The headwinds you're speaking of are economic, yes?
Right. The combination of the presidential election, the recovery from 2008-09 recession and the situation in Europe have created a lot of headwinds. But since the recession started, we've tripled in size.
In terms of government, we're doing a lot of government business and [in 2010] we were selected by the Government Services Administration to standardize on Cvent for sourcing. We're seeing a lot of benefits there. Associations are all moving toward technology, maybe a little more slowly than corporate. The association space has been hit a little more than corporate, to some degree, but our association business is growing strongly.
It's going to reduce meetings a little bit, and when you reduce meetings the vendors that support them will have some headwinds. That is happening for sure. But the difference is that more people are moving to technology. The people in the government were not leveraging technology to do their meetings, whether it's sourcing them or running them. They were definitely not as attuned to the new technology as the corporate or association sectors were.
Does their embrace of technology balance out the cutback in meetings?
It's not a balance. We're definitely winning that.