These days, Ryan Smith – co-founder and CEO of Qualtrics – can’t go anywhere without getting the three-letter question: IPO. “Every time now it’s, when are you going public, are you jumping through this window?” said Smith in a Forbes interview. “The goal is not the IPO, it’s beyond that.”
For now, the much talked-about Qualtrics IPO is on hold. Last week, the online market research platform announced it has raised its third round for US$180 million at a whopping US$2.5 billion valuation.
The funding round was led by Insight Venture Partners and Accel, with participation from Sequoia Capital. This funding round increases Qualtrics’ valuation 2.5 times over its previous valuation in late 2014. This investment also makes Qualtrics the single largest aggregate investment in the history of the Accel’s portfolio.
“We have been following Qualtrics since 2010. Each year, they have surpassed aggressive goals and continued to stay cash flow positive. The company has even grown at an accelerating rate over this time, placing them among the best-performing enterprise software companies we’ve ever worked with,” said Ryan Sweeney, partner at Accel and Qualtrics board member.
“From a revenue standpoint, Qualtrics is already the size of most public companies and there’s room for a lot more growth considering the large and expanding market in which they play. The interest from investors everywhere underscores the notion that Qualtrics is likely the best private software company on the market today — we are very fortunate to be their partner.”
In addition, the company announced the appointment of Murray Demo, CFO of Atlassian, to its board of directors and as chair of its audit committee. In 2015, Demo guided Atlassian, another Accel portfolio company, through its S$4.4 billion initial public offering.
Demo previously served as CFO for tech leaders Adobe Systems and Dolby Laboratories. Qualtrics appointed former Apple and Google executive, Kim Scott, to the board in April 2016.
A bootstrapped unicorn
The Utah-based Qualtrics came from much humbler beginnings, bootstrapping the operation for a decade before finally taking financing from Sequoia and Accel in 2012. It has grown exponentially since, hitting unicorn valuation status just two years later, with US$150 million in annual revenue.
The recent funding announcement came on the heels Qualtrics establishing the experience management category and launching its XM Platform, which manages the four core experiences of business—customer, employee, product and brand experience—in one single platform. The platform automatically analyzes these touchpoints, helping organizations uncover key business drivers, predict future customer needs, and retain employees and customers.
“We have a lot of great momentum right now with the launch of the XM Platform. I could not be more proud of the team we have put together. This raise is a great step forward for everyone involved,” Smith said.
“Our investors doubling down is a huge sign of their confidence in the team and the amazing growth ahead of us with experience management.”
Jeff Lieberman, Managing Director of Insight Venture Partners and Qualtrics board member said: “One of the reasons we are so bullish on Qualtrics is that every organization in the world needs an experience management platform. It’s a single system of record for all your experience data. Qualtrics is to XM what Salesforce is to CRM—the category king with a product that is mission critical to every organization.”
“They have delivered accelerating growth at nine-digit revenue numbers all while staying cash flow positive. We’re excited to work with the Qualtrics team on their continued market leadership and success,” said Bryan Schreier, partner at Sequoia Capital and Qualtrics board member.
Qualtrics is a single system of record for all experience data, also called X-data™, allowing organizations to manage the four core experiences of business—customer, product, employee and brand experiences—on one platform. Over 8,500 enterprises worldwide, including more than 75 percent of the Fortune 100 and 99 of the top 100 U.S. business schools, rely on Qualtrics. You can learn more about them here.