So everybody knows Salesforce, which was founded in 1999, basically to manage your Salesforce.
But there’s another SaaS leader that almost everyone in B2B software, founded in 1999, also uses — to manage their events.
Cavant. It’s still around. A lot of it is a bit out of date, and hard to use, and expensive. But after taking a hit from the lockdown, it IPOed a second time via SPAC, and today stands at $650,000,000 in ARR, growing 20%, with a 21% EBITDA margin.
And its founder… is still the CEO.
And Cvent could be acquired for $4 billion, a premium to its current $3.6 billion market cap.
Let us take a look at 5 interesting learnings:
#1. Most managed to create virtual events. While the overall category of virtual events software is in a funk, Cvent did just fine.
# 2. Two related products are the key to development. 70% of Cvent’s revenue comes from its event software. But 30% comes from its so-called “hospitality cloud” which is really a marketplace for event services. The marketplace side was hit hard by the closure of events during Covid (and had a lower gross margin), but is still a significant contributor.
#3. NRR is back up to 116% – higher than pre-Covid. Cvent’s NRR made sense when Covid shut down most events, but it jumped higher than in 2019.
#4. Only 60% gross margin. Cvent’s margins are very low for a SaaS company. They have interchange revenue from the hospitality cloud and on-site event revenue is also low margin, so it makes sense. Still, 60% is on the verge of being a software company. That’s low, and less than a year ago.
#5. 86% of revenue from North America. Little surprising, considering the events are global.
And some other interesting lessons:
#6. Not profitable due to stock-based expenses, but generating material cash-flow: 20%+ “adjusted EBITDA”. Even after 24 years, Cvent isn’t exactly profitable, but aside from stock expenses and a few other fees, it generates significant cash.
Cavant. Is this our favorite event software here at SaaStr for our own events? not good. It’s a bit dated, expensive and hard to use. To be honest, none of the software in this category is that great.
But he never gave up, and has been the gold standard in the enterprise for many years. And while not a true rocketship—they haven’t crossed $1B in ARR after 24 years—they never stopped, IPO’ing, getting acquired by Vista, and IPO’ing again.
And it’s still putting up solid growth numbers and lots of free cash flow today, 24 years later, at $650,000,000 in ARR.
Published February 8, 2023