According to an IBISWorld research report, the US market research market is estimated to be a $20 billion industry this year, having reported a modest 0.4% annual growth since 2011. The future of the industry is expected to be driven by the growing use of social media that will revolutionize traditional methods of conducting market research.
Provo, Utah-based Qualtrics was founded in 2002 by father-son trio – Scott Smith and his sons Ryan and Jared Smith. The idea for Qualtrics came about back in the 1990s, when Scott Smith, a professor of marketing at Brigham Young University, was working on a consulting project for BellSouth that made him realize the need to speed up market research using the Web. A few years later, Scott, now recovering from radiation treatments for throat cancer, started contracting college students to build online survey software.
For the next three years, Qualtrics sold its solution to graduate schools. It worked with doctoral researchers who were working on sophisticated problems and needed surveys that could mask the real focus by asking varied questions. The result was a software that could meet the needs of students’ thesis ideas. After that, the route to the corporate marketing world appeared much simpler.
Today, Qualtrics is a Software-as-a-Service company that claims to be among the world’s leading insight platforms. Its solution simplifies and accelerates the process of capturing customer, employee, and market insights in a single place, thus helping its clients make informed business decisions. Qualitrics began by focusing on schools, but it is now being used by global enterprises across industries including government agencies. Its customer list includes more than 8,500 enterprises globally, which includes half of the Fortune 100 and 99 of the top 100 business schools. Its platform hosts more than 2.1 million active customers daily.
Qualtrics is a privately held company and does not disclose its financials. But reports from back in 2012 reveal that the company was trending at revenues of just under $50 million and has been profitable since it was founded. In 2014, the company’s revenues had more than doubled to over $100 million and is estimated to have generated more than $125 million in 2015 while remaining profitable.
Qualtrics bootstrapped for the first ten years of its operations. In May 2012, the company finally accepted a $70 million funding from Accel and Sequoia. In 2014, Qualtrics raised its second and last round of funding so far. It raised $150 million from Accel and Insight Venture Partners at a valuation of $1 billion. Qualtrics planned to use the funds toward market expansion to help grow revenues to north of $1 billion before going public. While that revenue number may not be achievable soon, analysts expect that Qualtrics may still be ready to list this year.
Qualtrics distinguishes itself from competitors like SurveyMonkey by focusing on corporate needs. Earlier this year, it released a new product called Qualtrics Insights Platform that integrates the customer and employee research tool. Qualtrics believes that by integrating research from employees and customers, it is able to deliver more comprehensive data insights. Companies like Apple already follow a similar principle where it takes customer surveys from retail stores and shares them with its employees. Qualtrics now plans to offer this expertise to all its customers.
This segment is a part in the series : 2016 IPO Prospects