Like everything else, event technology is going mobile. It’s only natural then that the world’s largest provider of cloud-based event management solutions Cvent would want to join the party. Today the company announced the acquisition of Austin-based mobile app developer Seed Labs in a transaction valued at $4.2 million.
Seed Labs specializes in applications for consumer and social events, like festivals, concerts, and sporting events. Its portfolio of prominent clients included ESPN’s XGames, the Kentucky Derby, and the New Orleans Jazz Fest.
Cvent has historically been a B2B company, offering online event registration, commercial venue sourcing, meeting management, and survey and emarketing tools. Last year the 1,000 employee company facilitated close to $6 billion worth of venue bookings.
With the addition of Seed Labs, Cvent gains in a number of areas, not least of which being that the mobile studio brings experience developing for consumers. “Seed labs bring a lot of strategic expertise that will help us grow our other businesses units as well,” says founder and CEO Reggie Aggarwal. “Cvent is a 13 year old company. We haven’t been a startup for a while. The Seed Labs guys bring back some of that culture of innovation that will be a big boost for us.”
Cvent apparently looked at more than 20 consumer mobile companies before choosing Seed Labs, the majority of which were recommended by its own customers. This was a deliberate transaction, “not one completed for the sake of justifying some corp-dev guy’s salary,” says Aggarwal.
The CEO describes his two priorities as first, “making sure we acquired company had a great product. We want to buy best practices in any industry we want to enter. With Seed Labs, we have absolutely done that. [This acquisition] puts us in a unique position to quickly scale our product offerings and expand into new markets.”
Second, the company really focused on cultural fit and shared vision. This showed up in the decision to keep the Seed Labs in Austin rather than moving them to Cvent’s Virginia headquarters. Since the acquisition was quietly completed in Q1 of this year, the mobile developer has tripled its staff through a combination of both hiring and talent transfers from Cvent.
In July of last year, Cvent raised $136 million from from NEA and Insight Venture Partners. While terms of the financing were not disclosed, the CEO revealed that the round was for a minority stake, making the pre-money valuation at least $136 million.
In spite of the implied size and success of the company, the round was its first outside capital since 2001 and came at a time when it had been profitable for 36 straight quarters. According to Aggarwal, the reasons for taking on new investors were more strategic than financial. The Seed Labs acquisition was the first in the company’s history and, according to its CEO, outside expertise and relationships were a very welcome addition.
This transaction is the first example of the company putting its newly added advisory expertise and capital to work. While there’s no defined roadmap, the CEO suggested that this would likely be the first of a series of acquisitions going forward.