<B> PlanSoft Gets Cash</B>
By Chris Davis
In what has been a financial watershed year for the meetings technology industry, with strategic alliances and venture financing abound, PlanSoft Corp. struck one of the mightiest blows late last month by picking up $24 million in venture capital.
The $24 million represents one of the largest single finance packages in the history of the meetings technology industry.
"Clearly, this is a very significant investment that will help PlanSoft strengthen their organization and brand recognition," said Doug Fox, Fairfax, Va.-based technology consultant and publisher of the EventWeb newsletter (www.eventweb.com). "It seems to be the optimal time for such an investment, because the industry is becoming more competitive, with several well-financed companies. I think we'll look back at 2000 as the time where we see which Internet companies were most appealing to corporate planners."
PlanSoft president Ed Tromczynski said the Twinsburg, Ohio-based company primarily will use the money for marketing, promotion and additional staff. It produces meeting planning software that links buyer and hotel and hosts a three-pronged Web site (www.plansoft.com) that enables users to search thousands of hotels and other suppliers .
The venture package is led by New York-based Cornerstone Equity Investors and Philadelphia-based Comcast Interactive Capital. Those firms are joined by Cleveland-based Key Mezzanine Capital and Cleveland Pacific Equity Partners, and Chicago's Randolph Street Partners.
"This is going to allow us to open additional markets," Tromczynski said. "We'll be delivering our product set to part-time planners, like secretaries or administrators, who aren't necessarily professional planners. Secondly, we want to further open up to agencies, consultants and the trade show marketplace. We want to better address the people whom we think would like our stuff."
The meetings technology marketplace has grown rapidly in the past few years, and even more so in the past 12 months, with dozens of small software manufacturers and Web sites offering their wares to an increasingly techno-savvy market. PlanSoft's continuing money-raising acumen--it raised $11 million in venture capital in June 1998--offers it a leg up on a good chunk of that marketplace, and its chief competitor said that's not necessarily a bad thing.
"It's great, because it shows that the venture capital community is willing to invest in the future of the Internet model concept of what we do and what PlanSoft does," said Ed Sarraille, president and CEO of San Francisco-based meetings Web site Eventsource.com (www.eventsource.com).
Eventsource has raised $3.7 million in capital itself this year. "PlanSoft has good partners, but we are backed by Menlo Park, Calif.-based Sequoia Capital, the top Internet venture capital firm," Sarraille said. "It's one thing to raise the money, which isn't that difficult, but to execute is the key, whether it's PlanSoft or Eventsource. You've got to provide what the market wants."
Sarraille said there's plenty of room in the market for both firms. "The future of this market rests with electronic distribution, which is what PlanSoft and we are about," he said. "There are differences between our RFPs, for instance. We're very bullish and so are our investors."
Aside from two seats on the PlanSoft board of directors--one for Cornerstone managing director Tony Downer and one for Comcast managing director John Kole --there are no strings attached to the venture capital, said PlanSoft CEO David Hunt. "We don't have any mandates from the investors, so we'll continue to develop our solution set," Hunt said.
PlanSoft this year already has revamped its Web site, splitting it into separate sites for planners, hoteliers and other suppliers, and increasing the categories of suppliers available and the meeting industry news content. It also has continued to roll out its Ajenis software, which allows for meeting specifications to be communicated online between planners and hoteliers. After that activity, Tromczynski said the company will heed the industry's input on where to go next.
"We have focus groups all over the globe," Tromczynski said. "But we will be integrating all our products to the Web--the Ajenis, search capabilities, RFP and our content and data. It's a time of transition, but we will be able to hold the hand of the market."
PlanSoft, with 130 current employees, won't drastically increase its staffed operations, but will bring more support, sales and business development personnel into the fold, Tromczynski said. But while several travel industry technology companies recently have made moves toward going public, despite its new capital, PlanSoft is not on the precipice of becoming the first meetings technology company to follow suit.
"The public market isn't a big pot of gold," Tromczynski said. "It's another vehicle to take our products to a higher level and to broaden their appeal.