Cvent founder and CEO Reggie Aggarwal discusses:
- The benefits of going public
- What going public means for the meetings industry
-
The future of hybrid and in-person meetings
Meetings management titan Cvent in July announced that it planned to
go public during the fourth quarter of 2021 via a merger with special purpose
acquisition company Dragoneer Growth Opportunities Corp. II, a blank check
company formed by an affiliate of Dragoneer Investment Group. Cvent, founded in
1999, had been public once before but Vista Equity Partners took it private in
2016 when it bought the company for $1.65 billion. With the SPAC, other
companies can invest in Cvent at $10 per share, a figure that values the
company at $5.3 billion and could provide about $800 million in cash. Among
those investors are Fidelity Management & Research Co., Hedosophia, Oaktree
Capital Management and virtual conferencing giant Zoom Video Communications. Cvent
founder and CEO Reggie Aggarwal spoke with BTN senior editor Donna M. Airoldi
in late November and said the company planned to be listed on the Nasdaq exchange
the morning of Dec. 9. He also talked about the benefits of going public and the
future of the meetings industry. The conversation has been edited for length
and clarity.
BTN: Why go public again, and why now?
Reggie Aggarwal: We went private with Vista Equity Partners, and it's given us a
chance to really invest in the platform. We built a new platform, and then
added our virtual [functionality] on top. Now the market is at an inflection
point. There's been a huge shift, obviously, in our industry, and I think when
you go public, you create a big brand value from a global view. People tend to
know you more and to feel more comfortable to do business with public companies
because you have transparency in your financials and in your stability. So,
one, from a branding view, it really helps with your customers and your
potential customers because they know you as a more solid company. Number two
is that the capital raising will help fund a lot of our continued growth. We're
potentially raising $800 million, and we've got some great tier-one investors,
including Zoom. And then it gives transparency to your employees. They get
stock in a public company, which is very different than having it in a private
company.
BTN: Talk more about the industry being at an
inflection point.
Aggarwal: If
you look at next year, we have confidence that in-person and hybrid events will
become more important. 2020 and 2021 were about virtual. 2022 is going to be
about hybrid, which means hybrid, in-person and virtual. So we get perfect timing.
Over the last 18 months, there was a big shift. We were able to get back on a
steady state, and then we were able to make sure we launched our virtual
product. We saw quick success—within 12 months of launching our platform, we
had sold $266 million in virtual-related sales. Now we believe it's in a very
good position, and we believe it's a market leader just in itself. And then
we're moving from everything [being] virtual, virtual, virtual, back to hybrid,
which includes virtual, but it also includes in-person. … Forced digitization
is what happened with the pandemic. We quote the [2020] McKinsey & Co. study that basically said the equivalent of five years of digitization [happened]
in just a few months. Again, that's all part of the inflection point. It's the industry
shift, in terms of just going to hybrid, and then the inflection is also
digitization.
BTN: Not just virtual digitization, but measurement too,
correct?
Aggarwal: [At Cvent Connect, our hybrid customer
conference in August], we collected 750,000 data points. You might have filled
out a survey beforehand. We saw on mobile you were checking out this session,
or you went to this event or commented on [something]. We got to collect [those
points] in-person as well as virtually. Then you get to take that with you. That's
why we think one system of record, one platform—whether it's in-person, virtual
or hybrid—you gather the data, and then you feed that data into the CRM and
marketing automation so it activates the sales and marketing team. It's a
really viable way to build those relationships. We're able to know you and know
a lot about you because you spent two or three days there. … People are going
to use digitization to leverage the network better, to find the right people
that make it worthwhile for you to go [to an event].
BTN: What lessons did you learn from being a public company previously
that will influence your decisions this time? What might you do differently?
Aggarwal: When you're public, you have to make sure you run your
operations pretty tight, because you have to predict your business. There's a
culture called 'beat and raise,' and when we were public, for all 11 quarters
we beat and raised the numbers, which means we grew better than what we said every
time. When you're public, you want to build a good relationship with [Wall]
Street, and you do that by being predictable. Number two, there's a lot of
things you have to do to prepare to go public. We had a lot of those processes
in place— the financial discipline, the systems discipline. We felt really
comfortable about that to make sure we had those things in place. Candidly,
it's working with the Street, and it's making sure you have a tight operation.
Those are the two biggest lessons you learn in the process.
BTN: What does it mean for the business? How will
you operate differently?
Aggarwal: There's no real difference. What [going
public] does is it creates more transparency with your customer. That's one
benefit. The second is, we're raising more money, and with that money, we can
invest more. Cvent can be in a better
financial position. … And we're hiring more people, we're growing pretty
substantially, including hiring more engineers and client services. This is
going to help fuel that, because a lot of companies are capital-constrained. They
get the business, but then they can't hire the client service to support it
because they don't have the capital. We have the capital. Now that we have it,
especially when we go public, we're going to forward invest. If I'm a customer,
that's good. You're not worried that Cvent isn't going to keep up with the
times and the R&D and the support.
BTN: What size is the Cvent workforce now? What are your plans for
future growth?
Aggarwal: We're about 4,000 people now, globally, full-time employees. We're aggressively
hiring more engineers so we can continue to be innovators and invest in our
products and our platform. The other area that we're growing quite a bit is our
client service team, to make sure that we're there, because some of this stuff
is still new to [customers], like virtual. We like to say that the marketer and
event planner is becoming like a producer now, because especially if they do
the virtual stuff, now they're going to be doing in-person and hybrid. But they
have to have the skills. We call it the triple threat. They have to be able to
do all three, and we're giving them tools to do that. And they need more
training to do it, because it's still new to them. Because as people start
doing hybrids, like we did our first hybrid event in August, we learned a lot.
It takes time to learn it. And we're there to make sure that we partner with
our customers and make sure that we see them through it.
BTN: Do you have any concrete investments or
innovations to share?
Aggarwal: We recently launched our Cvent Studio tool. Imagine you can create more like a CNN or CNBC type of broadcast
with your personal laptop rather than in a multimillion-dollar production
studio. The meeting planner's or
the marketer's personal laptops can start producing broadcast-quality [events]
with engagement tools around it. Because what's happening is, events and video
are converging. And when you think about it, let's say you do a training.
People don't look at that as an event, but it's an event, right? You gather a
bunch of people, you're doing content. The marketer or the event planner can
get more involved to make that more engaging.
Our virtual product is
still new. We launched it a little over a year ago … and we're continuing to
improve it, putting in significant things. [Studio] is part of it. But we have
a lot of other areas that we're continuing to invest in, and an example is
making our products easier to use, because now we're empowering more people to
produce things.
BTN: You've placed your bet on hybrid. Is your outlook the same for
hybrid versus in-person versus virtual as it was this past summer, or going
back to 2020?
Aggarwal: With the delta variant, the whole industry took a little bit of a
step back … in Q3. We still started seeing people accelerate, and we're
starting to see them have more confidence in next year. And they're buying more
of our in-person and hybrid products than they have since the pandemic started.
The delta variant definitely had a negative impact to the industry. But it
actually continues to make people very dependent on technology, [and] maybe the
balance [now] is more virtual than in-person. But it doesn't matter because
every quarter out, I think that it'll start flipping. You'll start getting more people coming in-person. And
whatever that balance is, net-net, the event industry's going to be stronger,
because you'll have more participants. … Just like Cvent Connect this past
August—we had more participants than we've ever had before, even though it was
a blend of in-person and virtual. Then as things get better, you'll get more
balance toward in-person. But overall, the total headcount is stronger. And
when you have more engagement from a larger group of people, usually the
organization puts more money in events and realizes the importance of it, and
that's good for our industry.
BTN: If
you don't see hybrid develop the way you anticipate, how will that affect the
company?
Aggarwal: The reality is that just won't happen. Sure, there
will be some events that go just in-person. But if you have a reasonable-sized
program [with] a reasonable amount of events, you're going to have to do all
three. Let me tell you why virtual is important. If you do an in-person midsize
event, if I go to that event and there are three breakouts at the same time, I
can only go to one. I'd want to see the virtual content for the other ones. … The
reality is, it's going to be all three [types of events], and we're prepared for all three.
BTN: Are you looking at any acquisitions?
Aggarwal: Part of our strategy is that we will do acquisitions when they
make sense. If we find something that makes more sense to buy than to build,
then we'll buy and add it and get it to our customers. The key thing for us is
to integrate it with our platform so that data is seamless and the experience
is seamless. There are some interesting companies out there. The challenge has
been companies getting scale. A lot of them tend to be small and stay small. But
if it makes sense for us and our customers, then we do have the capital to
acquire companies. And that is one of the reasons when you go public, you can
access capital very quickly and very readily.
BTN: How is the small, simple meetings
self-service product coming along?
Aggarwal: We're just launching it. It's not complete, but we're starting to
test the water. We think that's going to be a product that a lot of planners
want because when you book, say, a 12-person board dinner or a board meeting, …
you can just do it more easily than through a [request-for-proposals] process. We
think planners will find that compelling, and we're getting a lot of good
support. It's just the beginning. This is a project that will take a little bit
of time.
BTN: What does going public mean for the meetings industry
overall?
Aggarwal: We believe [Cvent is] one of those bellwether companies. We're meeting-centric;
it's our core business. With us going public, it's inspiring the rest of the
industry. 'Hey, Cvent's getting warm reception from Wall Street, and that bodes
well for the industry and that things are starting to return.' … From a
meetings industry [perspective], us going public shows that things are coming
back. Now, of course, it could be virtual, which is part of the driver. It's
not necessarily all in-person. But I still think that the meetings industry in
general will benefit, because we're educating the industry. Like when it comes
to educating Wall Street, people who control tens of trillions of dollars of
capital. The people that are hearing our story, collectively. We're telling
them how big the industry is ... it's a trillion-dollar industry. We're telling
them how, from a [return on investment], if you're a B2B company and the CMO
spends a quarter of their marketing budget on meetings and events, it's an
important thing. And they're realizing how important it is, especially with the
pandemic. … When we went public in 2013, no one hardly heard of the meetings
industry. What they thought about it was the big trade show companies. That was
their lens, and as we all know, the trade shows are just a very small component
of that trillion. It's the small meeting, midsize, large, internal, external—people
wouldn't realize how big the industry is. I think that we're out there
championing the industry, and I think that's good for everybody.