Qualtrics set to earn a $14 billion valuation on second go at IPO

PROVO — Just weeks after Ryan Smith, co-founder of customer experience innovator Qualtrics, was announced as the new majority owner of the Utah Jazz after closing a deal rumored to be worth $1.6 billion, the company he helped launch is poised for a highly touted public stock offering. Again.

Just a few days before Qualtrics was set to make its stock market debut in the fall of 2018, news broke of a blockbuster deal that had German software giant SAP shelling out $8 billion in cash to add the company to its portfolio.

Now, SAP is set to retain about 80% of the company, according to a Monday filing with the U.S. Securities and Exchange Commission as details of a second stock offering effort are revealed. The expected stock price range of $20-$24 per share would vault Qualtrics’ valuation to between $12 billion and $14 billion, a 50%-plus jump over SAP’s 2-year-old purchase price.

Smith will hold about 1% of the stock after the deal, with private equity group Silver Lake Partners spending $550 million to acquire 4% of the company.

Initially conceived of as a survey tool for academics, Qualtrics morphed into a set of tools and deep data analysis optimized for assessing clients’ business vitality, as viewed through the eyes of their clients and/or employees. This new set of analytics and insight theory has grown to become its own business category, and Qualtrics is both the progenitor and leader of the customer experience realm.

In an interview following news of the Jazz purchase, Smith said his plans were to continue leading Qualtrics, founded in Provo in 2002, alongside his new responsibilities as Jazz owner. Ryan and brother Jared Smith launched the company together based on technology first developed by Ryan Smith and his father, BYU researcher and professor Scott Smith, amid the elder Smith’s fight (it was successful) against throat cancer.

In its filing, the company said it now has a client list numbering more than 12,000 and employs over 3,300 people in 25 countries with co-headquarters operating in Provo and Seattle.

Qualtrics has almost doubled its workforce since joining the SAP group and last fall announced plans for an expansive renovation of its Provo offices that will include a new, 40,000-square-foot day care facility. The company also occupies 275,00 square feet in a new downtown Seattle office tower that bears its name.

Qualtrics’ revenues have also grown under SAP ownership, with 2020 revenues up over 36% to $723 million over the 12 months ending in September, according to its SEC filing. The company believes its total addressable market is north of $60 billion.

The Qualtrics deal comes on the heels of some other blockbuster stock offerings in 2020 despite depressed economic conditions brought on by the COVID-19 pandemic. Airbnb saw its stock more than double on the first day of trading earlier this month after its public market debut and had a market capitalization of nearly $90 billion at midday on Tuesday. And food delivery service Doordash also debuted stock in a December mega-offering. It’s stock was trading at around $144 per share Tuesday, well ahead of its $102 per share premarket pricing.

Qualtrics stock, which will trade on the Nasdaq under ticker symbol XM, is likely to make its public market debut in January or February.