IPO FILING: Convio, Inc, (CNVO, BLKB)

Convio, Inc. has filed to come public via an IPO under the proposed ticker "CNVO" on NASDAQ.  This Austin, Texas-based NPO software and service operator has a pretty impressive underwriting group with Goldman Sachs as the lead underwriter and others listed as Thomas Weisel, William Blair, JMP Securities, and Pacific Crest.

The company has on-demand software and services that enable nonprofit organizations to more effectively raise funds, influence public policy and support their missions.  It claims it is leveraging the Internet to build strong relationships with constituents for fundraising, advocacy, email marketing and web content management complemented by consulting services.  Convio says it developed its solution based on interactions with more than 1,200 active NPO clients; but as of June 30, 2007 its clients include 22 of the 50 largest charities in the United States.  This includes the American Red Cross, American Cancer Society, CARE, Catholic Relief Services, Feed the Children, Inc., The Ocean Conservancy, Inc., Paralyzed Veterans of America, Public Broadcasting Service, Shriners Hospitals for Children and Smithsonian Institution.

For fiscal 2006 it posted $30.674 million in revenues, with an operating loss of $11.92 million, and a net loss of just over $12.5 million.  In the first 6 months of 2007 here are the stats compared to 2006

YEAR    REVENUE        OPERATING    NET
2007    $18.432M    -$6.345M    -$7.499m
2006    $13.714m    -$6.039m    -$6.196m

There are items that can explain this higher operating loss and higher net loss on revenues, but ideally that would look a little better.  As of June 30, 2007, it listed 301 employees that are all based in the United States: 114 in sales, marketing, account management and business development; 42 in R&D; 123 in services, support and operations; and 22 in general and administration.

This looks on the surface as though it has many overlaps with Blackbaud, Inc. (NASDAQ:BLKB).  Blackbaud can help manage a nonprofit organization’s fundraising activity, address the accounting needs of nonprofit organizations, and organize an independent school’s admissions and registrar processes.  There is obviously Not a perfect overlap per se, but in the realm.

Jon C. Ogg
August 31, 2007