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Monday, September 10, 2007
More industry news- Convio plans to go public
Convio, a maker of website software for non profits, announced last week that they are planning to go public, joining Blackbaud (BLKB) and Kintera (KNTA). Unfortunately, they also had to disclose their financials, and once again showed just how difficult it is to operate profitably in the non profit market space. (They lost $12.5 million last year and are on track to lose another $12 million this year)
I've had the good fortune of working with Convio as we both share numerous clients- both large and small- and I've also met several times with Vinay Bhagat, who founded Convio in 1999. I generally think that they have pretty good software and good customer support. We've had some minor integration issues over the years, but nothing that couldn't be worked out between us.
Their aquisition of Get Active earlier this year seemed to drive their need to go public or get bought out. In addition, as I mentioned in previous postings, the time frame for the VC money to cash out was approaching, and something had to be done. Based on these facts, it's not at all surprising that they took the step to go public.
But will this step be good for the nonprofit community? On one hand, having more public companies that focus on our community is probably a good thing as it will increase the attention our sector desparately needs. On the other hand, like Kintera and Blackbaud, Convio will be forced to bend to the pressures of Wall Street and increase their profits, and it may come at the expense (and not benefit) of their customers.
I do wish Convio good luck with the process and be assured that we'll be there for our joint customers as Convio rides the inevitable roller coaster ride of regulatory filings and paperwork.Labels: Convio
Monday, March 05, 2007
Upheaval in the NonProfit Marketplace
Wow, there's been a lot of news about software vendors serving nonprofits. In the last month we had:
Convio buys GetActive
BlackBaud buys Target
Kintera's CEO Resigns
Convio's move to merge GetActive probably makes a lot of sense. Both companies offered, for the most part, similar Web Content Management solutions for medium to large non profit organizations. GetActive focused on advocacy type clients, while Convio strength lies with web fundraising tools. Personally, I've had excellent interactions with both companies, and wish them the best in their merger. It won't be easy, and the buzz is that they will have some work to do to make sure they are known as ConActive and not "GetConned". Again, I've got faith they will be able to pull it off.
As for Blackbaud's purchase of Target Software and Target Analytics- it probably makes sense too. Blackbaud has been traditionally strong for some larger organizations. Of course, I'm a bit prejeduced- though there are many times when DonorPerfect is a better solution, Blackbaud does make sense for some clients as well. However, they lacked a top tier product, one that was capable of handling the largest of organizations (i.e. those organizations with millions of donors). They get access to this market with Target and it was obviously important because they paid through the nose for it- to the tune of $60 million (plus another $2.4 million in potential bonuses, but who's counting?). This is a pretty incredible number, as it represents more than 2X sales for Target and this multiplier is much higher than when they bought Campagne Associates/GiftMaker Pro last year (for only $6 million).
Finally, Harry Gruber resigned from Kintera. This was probably a good move as well in the fact that you didn't have to do much research on the Internet to find that he had some detractors. Combined with the fact that Kintera's stock dropped from a high of ~ $17.50 to ~$1.70 as of today and has lost 118 million dollars (not a typo!) since they became public makes this decision easier. Again, we have some joint clients, but it's been difficult to integrate with Kintera because their software seems to change all the time. I hope they are able to turn it around as there are a lot of organizations depending on them.
So where does that leave DonorPerfect? Are we going to be the next takeover target?
I really, really don't think so. Though we get offers all the time, we really have no reason to sell or merge. We have a rapidly growing client base, and we've been consistently profitable for over 20 years. Unlike other companies in our space, we have never been dependent on VC money, so there is no pressure to sell or go public. (Companies that accept VC money typically have to pay back that money after 7-10 years by selling, going public or filing for bankruptcy and liquidating (ouch!!)).
In fact, here at DonorPerfect we're thinking about acquiring businesses that share our philosophy and approach- if you know of any, drop us a line!Labels: Blackbaud, Convio, DonorPerfect, Getactive, Kintera, Technology News
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