VIRGINIA: McLean, Va.-based Cvent, a provider of online event management and Web survey products, has secured $136 million in new funding led by New Enterprise Associates and Insight Venture Partners, with Greenspring Associates participating in the round. Cvent said it is its first funding round in over a decade. The company plans to hire more than 200 employees over the next year, bringing the headcount to 1,000. At least half of these new hires will be engineers focused on developing cloud-based event management and Web survey products. "We pride ourselves in our company's stability," said Cvent founder and chief executive officer Reggie Aggarwal. "This is evidenced by the fact that 11 of our 12 senior management executives have been with the company since its inception and we've had 40 straight quarters of growth." According to Dow Jones VentureSource, the round is the largest investment in a private business software firm in 2011 and the eighth largest investment in all industry sectors. The company had 41 percent compounded annual revenue growth in the last five years and doubled clients in two years to over 7,500. In a guest posting on TechCrunch after funding was announced, Aggarwal said that in the late 1990s, he worked 60 hours a week as an attorney and launched the Indian CEO High Tech Council in Washington, D.C., where he organized events for local tech CEOs. "I used to joke that it was a good thing I was the president of the group, because I'd never qualify for membership," he said. "Marketing to these CEOs, getting them to RSVP to the event invitations and securing their attendance was painful. I knew there had to be a way to streamline the process." Aggarwal founded Cvent in September 1999. "I was 30 years old, living at home and borrowing money from my parents to fund my dream - I was like the Indian George Costanza," he said. "Those were wild times. I wasn't taking any salary and quickly ran up $250,000 in credit card debt. But lucky for me, as a law grad, credit card companies practically begged me to open lines of credit with them." "So, just before quitting law, I signed up for 10 cards to bankroll my idea. Everyone had a start-up back then. I thought it would be easy. It wasn't." Aggarwal began with a six-person team who took "massive pay cuts and worked out of broken-down offices - complete with the start-up lore of mismatched furniture and Wonder Bread sandwiches." After the dot-com boom, the company "raised $17 million in venture capital from the D.C. 'tech glitterati', such as the CEOs of AOL, Nextel, Bell Atlantic and Nortel," he said. Cvent grew to 125 workers, but after the dot-com bubble burst "we quickly fell from being a hot start-up to being the walking dead," Aggarwal said. "We had less than $400,000 in the bank. Our revenue was $1.5 million and we were burning through a million dollars a month. The press completely turned on us and wrote articles that Cvent was going to wither like all the other dot-com companies. We had to cut expenses fast." Aggarwal said that the firm was ready to sign a five-year lease for space, but was only "one payroll away from running out of money and were forced to cut 80 percent of our staff. We were left with an office for 250, but only 26 employees, and our landlord wouldn't reduce our rent unless I personally signed the renegotiated lease." "I weighed signing a $1.5 million office lease and the prospect that if the company failed, I'd have to file for personal bankruptcy and would never be able to practice law again at a big firm. I had hit rock bottom," he said. Aggarwal asked his management team if they were "all in." "I doubled down and essentially signed my life away. I personally guaranteed every loan and fought for Cvent's success." "We raised no additional money, nor did we try to. We focused on the basics: building a good product, servicing our customers and hiring great people. We relied on our guts and instincts, but also made sure that we had the data to back up our decisions." "In 2003, we turned the corner of profitability and the first rays of hope began to show themselves again. Today, Cvent is a highly profitable 800-person start-up. Yes, I mean start-up, because we will never forget where we came from and we never again take anything we have for granted." Aggarwal was named Ernst & Young Entrepreneur of the Year in 2009 in the Greater Washington area and Forbes magazine called him one of the rising stars in Washington, D.C.
No comments:
Post a Comment