<B> Meetings Technology Companies Consider Going Public</B>
By Chris Davis
With the value of Internet stocks soaring for most of 1999, two major online sites are beginning to hint at the possibility of introducing the meetings market to Wall Street.
A restructuring of management and an infusion of venture capital at EventSource.com may well be paving the way for it to become the first online site selection and RFP company to take itself public. The San Francisco-based company, whose site includes a database of more than 12,000 hotels and other facilities to which planners can e-mail requests for proposals, has added a president and CEO, a board of directors and $3.7 million in venture capital from Sequoia Capital of Menlo Park, Calif.
While both company founder Brian Langer and new president and CEO Ed Sarraille declined comment on whether an IPO is in EventSource.com's future, Don Valentine, founder of Sequoia Capital and new member of EventSource's board, was more forthcoming. "There is not a short-term track for such a move," Valentine said, "but beyond 2000, or even in late 2000, there's a real prospect for going public."
EventSource.com's latest moves, all completed last month, walk and quack like an IPO duck:<ul>
<li>The $3.7 million in venture capital from Sequoia, which has funded Internet companies like Cisco, Yahoo and eToys.
<li>A new board of directors, comprised of Langer, Sarraille, Valentine and Pat Foley, president and CEO of DHL Corp. and former Hyatt Hotel Corp. chairman.
<li>Sarraille, a former Hyatt marketing executive and founder of design and advertising firm E.J. Sarraille and Co., will handle day-to-day operations while Langer explores financial opportunities.
<li>Finally, the company tacked on ".com"--three letters that have proven quite lucrative on Wall Street over the past nine months--to the end of its name.</ul>
Several travel technology suppliers have completed the transition to publicly held entities, including expense reporting vendor Concur Technologies of Redmond, Wash., hotel technology company Pegasus Systems of Dallas, Preview Travel of San Francisco, and two GDSs, Galileo International and The Sabre Group. But those companies all purvey technologies aimed at the business travel industry as a whole rather than exclusively for the group segment.
The funding that an IPO would bring EventSource.com would give the company a leg up in what is becoming a crowded field of online RFP sites (<I>Meetings Today,</I> Feb. 22). EventSource's primary competitor is Twinsburg, Ohio-based PlanSoft Corp., which offers the Ajenis meeting planning software in addition to its PlanSoft Network site-selection Web site. Its last capital infusion was about $11.25 million received from a venture capital consortium last summer (<I>Meetings Today,</I> Aug. 17, 1998). It, too, appears to be considering a run on The Street.
"There are too many factors in play to really give you much of an answer on whether we're going public, but anyone dealing in e-commerce would be crazy not to consider an IPO, because it's a wonderful time for it right now," said executive vice president Ted Frank. "We picked up more than $11 million from some of the biggest venture capital guys, and it's logical what their expectations are: continued growth and opportunity."
Meanwhile, EventSource.com will use its new funding to stay the course and build its infrastructure, Langer said. The company plans to add staff and power to its site. It also is positioning itself as a full-service third party by offering to negotiate meetings contracts.
"Money is plentiful today," Langer said. "You evaluate venture capital firms against their abilities to build strong boards and recruit executive management, which we've done."
Sarraille worked under Foley as vice president of marketing from 1968 to 1978, then formed his own marketing company that counted a number of hotel chains in its portfolio. He sold that company in 1996 and has since worked as a consultant. "I can provide a bridge between the traditional approach of marketing and the latest content the interactive model can provide," he said.