Vista’s pending acquisition of Cvent is an important milestone in the evolution of event technology, and the largest event technology transaction in history. It’s a clear bet by some very savvy investors – Vista Equity Partners – on the event technology category. And the fact that Vista paid nearly a 70% premium on the public market’s price shows the strength of their conviction.
It also feels a bit like the end of an era. Is event registration officially dead as a driver and center of gravity for event technology innovation? It may be. Not many companies acquired by PE prioritize technology innovation.
After taking a few days to reflect, here are some of my initial reactions:
Respect. Congratulations to Reggie and the Cvent team. Their survival of the first dot-com crash is the stuff of legend, and it’s hard not to admire an entrepreneur who is able to guide his company to such a substantial exit over such a long period of time. Any entrepreneur knows that it’s a grind. And these guys have been grinding for 17 years. Respect. Silicon Valley could learn a thing or two from this crew.
The Boldness of the Bet. Vista is a serious group, with serious technology investment chops. The stunning premium they paid to acquire a direct competitor of their own fairly recently assembled portfolio company – Lanyon – is nothing if not bold. Clearly they are believers that technology is going to reinvent the biggest marketing spend in the world. We agree with them.
Segmentation? Combining Lanyon and Cvent under one owner (regardless of the company structure that shakes out) presents some interesting opportunities for segmentation in how the combined entity thinks about the market for event technology. Lanyon is quite strong at large events. Cvent is very strong at meetings. In one fell swoop, each company’s primary competitor has been eliminated, clearing lots of white space for each. This should eventually pay back their investors due to increased pricing leverage. I’m not as bullish about the impact on customers, whether they be event owners or hoteliers.
Mergers are very hard. It’s still unclear if Cvent and Lanyon will be merged, but you have to expect that this is the eventual play. I’ve been through several mergers, and there will certainly be a period of paralysis for both companies. People will be worrying about their job security as Vista runs their playbook of eliminating duplication, and seeking efficiencies. Cultural differences and geographic differences will need to be overcome. And a longstanding and intense rivalry will need to be put to rest. As I said, these things are hard, and the combined entity will face substantial execution challenges for the immediate future. Can the combined company continue to serve their customers at a high level during the transition? If history is a guide, it will be a challenge.
Farewell, innovation? Part of me is quite sad about this news, particularly around the potential negative impact on innovation in event registration. The typical (though in fairness, not universal) Vista playbook is well known, and Lanyon can probably attest. They buy an asset, typically one that they view as underperforming. They eliminate duplication, slash R&D, optimize for financial performance, and raise debt to pay for the deal. It’s financial engineering at a major league, world class level, as few other firms are capable of. Don’t get me wrong – these guys are respected operators, and they run their playbook extremely well. But technology innovation is not typically part of the equation, which means that two of the most formidable technology companies in the world of events now face a future guided by financial engineering, not technology innovation. This is a loss for the industry.
It’s clear that I am far from an unbiased observer. I am the CEO of DoubleDutch, a growth stage startup in event tech. We have a horse in this race.
And we do not believe that now is the time to stop innovating. For the first time, the infrastructure and ecosystem is at a point where digital principles and methodologies can be applied to a physical world event. Event engagement can be tied to business outcomes, and real-life signals can be digitized and quantified.
If there is a silver lining here, it’s that the window is wide open for more modern entrants like DoubleDutch to gain momentum, taking advantage of the innovation void within the market leaders. Companies where technology innovation, and not financial engineering, is still the primary reason we exist. And there are hundreds of us, digitizing workflows and experiences, engaging attendees and exhibitors, and starting to make real progress in instrumenting the ecosystem.
Cvent and Lanyon have done a marvelous job digitizing what was previously a painful event manager workflow, and connecting event planners to vendors. But the real fun starts now, and a much larger prize awaits the companies that can truly bring the power of digital to an analog world.