After the dot com bubble burst, Cvent, an online events management company, had to scrimp. The company barely survived.
Twelve years later, founder Reggie Aggarwal, pictured left, had the pleasure of announcing a $136 million round of funding earlier this week — its second round ever — from New Enterprise Associates (NEA), Insight Venture Partners and Greenspring Associates.
This is the biggest software funding deal since 2007, according to Dow Jones.
Events coordinators use Cvent to organize all their event details, find and reserve vendors, and conduct surveys. The company has a specialized marketplace for vendor discovery and serves 30 of Fortune 100 companies.
Back in 2001, two years after the company founded was founded, it received $17 million in first round funding, which Aggarwal admits the company blew through. He leased office space, set up office infrastructure and prepared to hire, hire, hire. Then, the dot com bubble burst and Aggarwal laid off 80 percent of his staff.
With humor in his voice, Aggarwal told VentureBeat about the consequences of laying off the engineer who handled all of the company’s internal telecommunications. “For two years we couldn’t change our voicemail,” he laughed.
Adding insult to injury, Cvent needed to get back to startup stage. So, the company shed any unnecessary spending.
“It teaches you best practices, you learn how to save money and get customers the right way, you learn sustainable practices,” Aggarwal said.
Bootstrapping builds strength, according to Aggarwal. In fact, Cvent has run on profit for 102 straight months, he said. The company waited for the second round of funding until it had the right investors to take them into the future. “[Partners] help you create a path for the next five to ten years.” He is also excited to receive expert advice on IPO’s and acquisitions.
Yes, the company is considering an IPO.
“It’s not in the next six months, I can assure you that,” Aggarwal said. But Cvent is aligning itself with partners like NEA who has taken 165 companies public, but will wait to IPO until the grow the business.
“There are some neat, nimble companies in that space,” he explained. “We are smart enough to know that there are people who know a lot more than we do.”
The funding will otherwise be used to enhance Cvent’s Supplier Network. The network is a marketplace of restaurants, hotels, conference spaces, and other vendors for events ranging from the 30-person birthday party to corporate conferences. It then uses this data to provide search results, customizing it to your own personal profile.
For example, say you have a credit with Marriott hotels that will expire soon. Supplier Network will push Marriott to the top of your search and alert you of the outstanding credit.
“I can say that this is the largest and most accurate database in the world,” Aggarwal confidently said.
The Cvent Supplier Network is free to use, and generates revenue from advertising.
With the onset of growth for Cvent, Aggarwal has the warm fuzzies.
“Sometimes I say I’m Papa Bear and I have my cubs, which is the company,” Aggarwal said. And in the face of tech bubble rumblings, the bubble veteran isn’t freaking out. “We frankly have a good balance sheet and a good business model and now that we have our partners and world class investors, so I’m not that scared.”