SaaS Interviews with CEOs, Startups, Founders
1292 How Cvent Hit $500m Bookings with Eyes on $1B in Meeting and Event Space
06 Feb 2019
Chapter 1: How did Reggie Aggarwal start Cvent in 1999?
founded Cvent in 1999, went public 2013, took private in 2016 in a $1.6 billion deal with Vista doing about 220 million bucks then and it caught bookings today over 500 million bucks in bookings across 25,000 customers, you know, call it $20,000 ACV on average, approaching 4000 folks in the team so far net revenue retention between 100 and 115% offices all over the place.
Three acquisitions very acquisitive now, post kind of the Vista deal after they got fully integrated with Lanyon as they look to continue to scale with more organic growth, which is the main driver, but also acquisitions This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich or crash and burn.
Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple of hundred thousand dollars to 2.7 million. I had no money when I started the company. It was $160 million, which is the size of many IPOs. We're a bit strapped. We have like 22,000 customers.
With over 5 million downloads in a very short amount of time, major outlets like Inc.
Chapter 2: What led to Cvent's acquisition by Vista in 2016?
are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everyone. My guest today is Reggie Agrawal. He's the CEO and founder of Cvent, the leader in meetings, events, and hospitality software.
A lawyer by trade, Agrawal founded Cvent in 1999 as a two-person startup with the goal of making meeting planning easier for his peers in the business community. Reggie, are you ready to take us to the top? All right, I'm ready. All right, so 1999, obviously there's a big event that happens with you guys joining the Vista team in 2016.
And then I want to focus most of today's time on where you guys are at today in terms of growing rapidly.
Chapter 3: What software solutions does Cvent provide for event planning?
But first, for people that maybe have not heard of Cvent and what you do, high level, what are you guys focused on?
yeah so what cvent does is we help people manage market and organize events so we give them different software tools like online event registration or a mobile app um or things to help them check in people you've gone to a large conference and you have 5 000 people in line how to process them through the check-in line so we do anything that helps organizations again manage market and organize events the other side we also help them find venues so we have a kind of expedia for meeting planners
site where you can go and find any venue. We have about 200,000 venues where you can find the right location for your actual event. So those are our kind of two products. So the event cloud, hospitality cloud, those are still kind of your main two cohorts. Great. So 2013, you grow the company, you end up going public. 2016, I think your last kind of quarterly update was 56.7 million-ish.
And so 224 million-ish run rate. Vista comes in and buys you for 1.6. Quickly, how'd you and Robert meet? So I actually met first, I met Brian Sheff. So Brian is the co-founder and the president. And so we actually met at one of the banking conferences at Morgan Stanley. Morgan Stanley took us public. So they have their banking conferences. So I was there, met Brian for the first time there.
I met some of their other Vista partners before. And frankly, we weren't looking at selling and it was just kind of, we met each other because they owned our largest competitor.
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Chapter 4: How has Cvent achieved over $500 million in bookings?
So we had a lot to talk about. Which was who? They owned a company called Lanyon. And Lanyon was an aggregation of about 20 different companies that kind of merged together. You know, we were number one in terms of size. They were number two. And they merged a bunch of competitors to take us on. And so we had a lot to talk about.
When you guys, when they eventually kind of convinced you guys to come in, what were you guys now the new hub or did they buy, they bought the spokes first and then the hub or were you smaller in terms of joining? So in the beginning they actually bought Lanyon, which was bigger than Cvent. Okay. At the time. Four years. Yeah. And so then what happened is that we ended up becoming bigger.
And so what they're based on the wrong horse. So that's basically what was the genesis of driving why they bought us because they love the meetings industry. It's a massive industry. A new study just came out 30 days ago, and $1 trillion is spent on meetings and events globally. It's equal to the same size of consumer electronics globally.
Chapter 5: What is the significance of net revenue retention for Cvent?
if you believe it. Bigger than the GDP of every country except 17. This is better than that. That's a good metric. That's a good metric. We just, we recently, about four months ago, actually six months ago, had Ryan on the show with Qualtrics. And one of the things he told us was kind of why and how they were thinking about potentially going public.
obviously that then created a forcing function to get obviously the folks to come in and pay, you know, billions and billions to kind of, you know, take them out beforehand. I imagine there was some circling of the waters on your end as well in 2013 when you announced, and that was obviously a high leverage point for you.
Why did you ultimately decide, you know what, we're going to call the bluff. We're going to go ahead and go public. We're going to prove it out instead of taking, I'm sure you had many big deals on the table to stay private. Yeah. So when we were, you know, considering public, you do have people come out of the woodworks,
um to look at us but we were very interested we believe long term in the business we thought we were kind of in early innings so frankly you just decide that we think going public is that is a better outcome for our shareholders but you know more importantly um than just that it was the best thing for a whole ecosystem which is our employees our customers and our shareholders so you know we had people approach us but we decided that going public was the right thing for us
And unfortunately, we didn't get 20 times revenue like Qualtrics as an offer because maybe that would change your mind if you get that kind of valuation. Why don't you get that valuation? So, you know, it's interesting. You know, I've actually met Ryan several times through the Morgan Stanley Banking Conference. It's a different one they do for private companies that I go to now.
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Chapter 6: How does Cvent plan to reach $1 billion in bookings?
And so it's a little, you know, look, they have a great company. They're growing fast. They're strategic. But still, it was a shocker for everyone because we've all been in this industry for a long time. And they're a great company, but they must have done a heck of a job in terms of positioning themselves strategically for SAP. Yeah.
Because it's probably the highest valuation that I've heard of in terms of multiples for a company of their scale. I think that's what the metric is. So when we end up going public, you always look at staying private. Going public and, of course, acquisition, but that was the right thing for us, and it ended up being the right thing because as an organization, we matured a lot.
When you go public, it changes you as a company because you learn to be much more disciplined. You have to be able to forecast better. You just get a tighter grip of your business. You build different sets of muscles, just like in life, and it's great when you start exercising different muscles because it makes you better and stronger, and that's what it did for us.
In 2016, again, the last quarter you reported had you about a $224 million run rate. And you also said in a press release around that time, you know what? We've got plans to triple this bad boy by 2020. Well, we're getting closer to 2020. How's that coming along? Yeah.
Chapter 7: What strategies does Cvent use for customer acquisition?
So I think our press release, it didn't say triple by 2020. I think it was over a five-year period. But like my investors, whatever number we say, they always take a year or two off of it. And then leak it to the press and then say, Reggie, this is what you said, Reggie. That's right. I was like, good try, but doesn't quite work. So we closed our deal in 16.
And so we have more than doubled already as an organization. So to give you a sense, we were about 1,800 or 1,900 employees. This year, we'll end the year, we're starting to approach 4,000 employees. And in terms of revenue, we've more than doubled. So you're north of 500 million at this point in ARR. Yeah.
So in terms of, we call bookings, you know, ACV bookings, everyone has, you have ARR, you have revenue, you have different metrics we call our bookings. Then that's the number we focus on because that's more of your future growth. Revenue tends to look at your past. What we've seen is the most important indicator of how you're doing the future is bookings because then
That shows your current work and your future work versus your past work. What does that mean, Reggie, though? Educate us.
Chapter 8: What are the first moves Vista made after acquiring Cvent?
So, I mean, is that you're taking essentially last month or last 12 months and it's an extrapolation forward or how? No, this is what bookings does. So, let's say you close a $12,000 contract in February, right? Or let's use in November. So, you put $12,000 on the sales board. If it's revenue, you get one twelfth of that. Each month? Each month.
So basically, the reason that matters is, let's say 10 months ago, we did 20,000. You're getting the benefit of the past work to get into the ā for your revenue in the future because your past ā performance is reflecting in the future. Bookings is what you did that month. So you get a real good indicator that we closed a $12,000 deal this month.
And so then I know how we're performing really now. And then I can predict my future now because I know I have another 11, 12, so it's going to hit next year. So we view bookings as a better number of your current performance. And it gives me the leading indicator of my future performance. Revenue is past performance. So that's why we love bookings. And so
So we are over, you know, we'll hit over half a billion dollars. So, so let me repeat that back to you to make sure I understand it. So if you look at the past just 30 days, you're essentially looking at bookings and recognized bookings in that slice of time.
And then you're obviously one 12th of that happening for next 12 months, each month, that, that number is over 500 million bucks is what you're saying. I'm taking our bookings for the whole past year. So I'm taking our year. Okay. Yeah, so reverse. We're not looking forward bookings. I'm looking backwards. So basically, we'll collect more than half a billion in cash this year. How does that?
That's great. The reason I ask, you know, I've had a bunch of Vista CEOs on the show. You know, Bill was interesting with MediaOcean, different business model. He's really envious, I think, probably of you trying to move more to a SaaS model and they're more of a transaction kind of ad spend play. And then, you know, the numerator folks. But more importantly, I had Andre on with Ping Identity.
And he said, yeah, one of the things we're actually doing is actually getting more aggressive with dollar-based CAC. When the acquisition happened, we were at $1.20 for a new dollar of AR. Now they're pushing up to $1.50, $1.60, $1.80. Because, and his thesis made sense, he said, basically, if you have confidence in your cohort data, the person that can spend the most to get the customer wins.
How do you feel about driving dollar-based CAC up? I mean, I think that's one metric. I mean, look, we've been profitable as a company. We're unusual because, as you know, as our startup store, we almost went bankrupt back in 2001 and 2002. So we became profitable in 2004. And so our margins are unusual for a SaaS company, especially I'm talking about back then when we were smaller.
Most of the SaaS companies that are growing fast, which money, like 95% of them. But because we're entrepreneur led, we didn't raise any money between 2000 and 2013. For 13 years, we didn't raise any capital. We relied on ourselves. So it changes the way you look at a lot of metrics. CAC is one metric. And I think I know Andre real well. And I think what he says is fair. You know,
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