After string of capital raises, acquisitions and a new HQ, Conga drums up talk of an IPO

BROOMFIELD  — After a summer where public Boulder Valley companies moved off the markets, software maker Conga is making noise of a possible initial public offering after establishing a new headquarters in Broomfield.

Conga, the trade name for AppExtremes Inc., is on pace to make upward of $110 million this year, Chief Financial Officer Bob Pinkerton told BizWest. That’s about a 25 percent growth in revenue from last year’s $84.3 million, according to Inc. 5000 statistics.

The company develops a cloud software suite that manages documents across businesses, creates document templates and electronic signatures.

He made no effort to hide the company’s interest in going public over the next several years, potentially pitting it against DocuSign Inc. (NASDAQ: DOCU) in the battle for streamlining document workflow.

New digs caps years of funding and dealmaking

Conga was founded in 2006 by Mark Whiteside and Michael Markham and grew to about 40 or 50 employees. In 2015, the New York-based venture and private equity firm Insight Venture Partners LP took a $70 million stake in the company and recruited former DocuSign CEO Matthew Schlitz to take the company helm.

Three years later, Conga went on a buying spree.

Within a single-month period in 2018, it acquired Indianapolis-based Octiv Inc., Des Moines, Iowa-based Orchestrate LLC and New York-based Counselytics, and took a $47 million cash infusion from Insight and cloud software maker Salesforce Inc. (NYSE: CRM).

Today, the company is putting the final touches on parts of its 88,000-square-foot building at 13699 Via Varra, featuring a gym, bike shop and an in-house kitchen that Pinkerton said cost into the seven figures. About 300 of the company’s 650 or so employees are based out of the office, and the company plans to hire 300 more over the next two to five years in sales and engineering roles.

It also breached $100 million in revenue as of late August, with more than 1 million licenses among 11,000 customers.

Boulder Valley’s next IPO?

Conga’s consideration of going public comes after a summer of mergers and acquisitions activity put several major Front Range companies off the markets, ranging from micro-caps to the far end of the mid-cap range.

Danish power company Danfoss A/S snatched up Longmont’s UQM Technologies Inc. for $100 million in August, while Pfizer Inc. (NYSE: PFE) bought Boulder oncology company Array Biopharma for $11 billion in July.

Boulder internet infrastructure company Zayo Group Holdings Inc. (NYSE: ZAYO) is also on its way off the market next year after agreeing to sell itself to two private investment firms for $14.3 billion.

Pinkerton, who was brought in from Denver-based ServiceSource Inc. (NASDAQ:SREV), said an IPO announcement isn’t imminent. But those discussions are part of a slew of options the company is continuing as it looks toward sustaining the revenue growth it’s captured and maintain it through three to four years.

“As we continue this growth trajectory, it’s very possible an IPO is in our future,” he said.

Grow by the Salesforce, die by the Salesforce?

Conga started off as an add-on app in the Salesforce app store, and the San Francisco-based customer management giant is just as vital in the company’s success today as it was when Conga debuted. Approximately 70 to 75 percent of Conga customers use the company’s products through Salesforce.

“Our DNA is really in Salesforce,” Pinkerton said.

While Pinkerton believes the company has room to grow its customer base within the Salesforce ecosystem, he said Conga is trying to add products that’ll draw customers from outside that platform.

Steve Koenig, an analyst covering Salesforce and other enterprise software companies for Wedbush Securities, told BizWest that Conga’s reliance on Salesforce is a logical strategy because they make for natural partners.

The biggest downside risk would come if Salesforce decided to make its own product suite to compete against Conga, or if it bought a competitor. He posited that Conga could become an acquisition target itself. But even then, Koenig said a disruption in the Conga-Salesforce relationship wouldn’t necessarily derail Conga.

“If they get 100 percent of the business from Salesforce and that’s its only lead generation mechanism, that would be bad,” he said.

As for potential growth, Koenig believes Conga has a high ceiling because its document creation and tracking products are more problem-specific compared to offerings from Microsoft Inc. (Nasdaq: MSFT) or other major competitors.

Setting the groundwork for scale

Pinkerton said the main challenge in the document transformation software segment is getting companies to adopt new systems of tracking documents and changes, both in physical paper and in how files are moved around intranets. The company’s biggest challenge itself, he said, is deciding how much of its newfound revenue to invest in its various businesses.

“I guess that would mean that the biggest hurdle in front of us is just getting in our own way,” he said.

Conga is also trying to find the staff it needs to grow by pitching itself to tech talent as an up-and-comer sandwiched between homegrown Denver companies like Ibotta Inc. and Slack Inc. NYSE: (WORK) and the satellite offices of tech behemoths like Google and Twitter Inc. (NYSE: TWTR) in Boulder.

“You can be part of leading and running the business,” he said. “We tend to attract the people who want something that’s a little earlier stage, who want something that’s high growth and that they can take a personal investment into.”

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