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.
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 (£1.25 billion). With Dragoneer, other companies can invest in Cvent at $10 (£7.50) per share, a figure that values the company at $5.3bn (£4bn) and could provide about $800m (£600m) in cash. Among those investors are Fidelity Management & Research Co., Hedosophia, Oaktree Capital Management and virtual conferencing giant Zoom.
Cvent founder and CEO Reggie Aggarwal spoke with Donna M. Airoldi, senior editor at our sister title BTN, 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...
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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.
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  McKinsey & Co. study that basically said the equivalent of five years of digitisation [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 digitisation.
Not just virtual digitisation, 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 digitisation to leverage the network better, to find the right people that make it worthwhile for you to go [to an event].
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.
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.
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.
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.
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 organisation puts more money in events and realises the importance of it, and that's good for our industry.
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 programme [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.
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.
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.
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 realise how big the industry is. I think that we're out there championing the industry, and I think that's good for everybody.
This story first appeared in Business Travel News.
M&IT editor Paul Harvey is a journalist with more than 15 years of experience. He began his career in the local press, working for various titles across the north. Since joining M&IT in 2013, he has become a trusted and respected voice in the sector, championing event professionals and reporting on all aspects of the events industry for the brand.