According to a recent MarketsandMarkets report, the global customer experience management market is projected to grow at a CAGR of 23% from an estimated $5.98 billion in 2017 to 16.91 billion by the year 2022. Provo, Utah-based Billion Dollar Unicorn Qualtrics realizes the importance of this market as it pushes its efforts within the sector.
Qualtrics was founded in 2002 by Scott Smith and his sons Ryan and Jared Smith. The idea behind Qualtrics came to Scott when he, a professor of marketing at Brigham Young University, realized the need to accelerate market research using the Web. He decided to work with college students to build an online survey software solution.
Initially, Qualtrics focused on an offering for graduate schools. It increased the sophistication of its surveys to address the needs of doctoral researchers. Qualtrics used the tools developed for schools to gradually expand to the corporate marketing world. Soon Qualtrics became a software-as-a-service company that has developed an insight platform. It simplifies and accelerates the process of capturing customer, employee, and market insights, and helps clients take informed business decisions. Qualtrics’s newest product is its customer experience management platform called XM Platform. The solution is focused on measuring and analyzing customer, employee, brand, and product experience.
Today, it has more than 8,500 organizations as its customers including 75% of the Fortune 1000 companies. It still offers its products to the schools, and has 99 of the top 100 U.S. schools using its services.
Qualtrics is not the only one in the space, but it does offer a more comprehensive solution than others. Companies like SurveyMonkey and Survicate provide a similar offering. But most of these tools have their limitations. For instance, SurveyMonkey’s surveys are good one off surveys, but they don’t repeat surveys to assess experience trends over time. Similarly, Survicate offers highly targeted surveys, but doesn’t offer detailed analytic capabilities.
Qualtrics is privately held and does not disclose its financials. Analysts estimate that its revenues were close to $50 million in 2012 and that it has been profitable since it was founded. By 2014, its revenues had grown to $100 million. In 2017, the company was looking to do $250 million in revenues.
The fact that Qualtrics was bootstrapped for the first ten years of operations is probably a driving force behind its profitable existence. Over the past few years though, it has accepted venture funding. Qualtrics has raised $400 million so far with investments from Accel, Sequoia Capital, and Insight Venture Partners. Last year, it raised $180 million at a valuation of $2.5 billion. Prior to that round, the market was expecting Qualtrics to list last year. Recent activities suggest that the IPO may be a possibility this year. Last November, Qualtrics added Barracuda Network’s former CFO David Faugno as its CFO.
Analysts are hopeful that Qualtrics is edging closer to a listing as it recently acquired a startup that could help those prospects. Earlier this quarter, Qualtrics announced the acquisition of Delighted, a customer experience measurement and rating company. Delighted was founded five years ago and has a customer base of more than 1,500 companies. Its products are used by its SMB clients to measure and improve customer experience. Delighted is known for its platform that integrates the simplicity of a one-question NPS, CSAT, CES, or 5-star rating with elegant, consumer-grade design, administration, and reporting. Qualitrics plans to leverage Delighted’s platform to continue to build on its XM Platform. Terms of the deal were not disclosed. Prior to the acquisition, Delighted had only raised a seed round of an undisclosed amount from Benjamin Ling of Khosla Ventures.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns.
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This segment is a part in the series : 2018 IPO Prospects