SAP, perusahaan teknologi terbesar di Eropa, telah setuju untuk membeli perusahaan perangkat lunak asal negeri Paman Sam, Qualtrics International senilai $8 miliar dalam bentuk tunai. SAP Jerman, yang dipimpin oleh kepala eksekutif Bill McDermott, telah memperoleh pendanaan sebesar $ 7.9bn untuk menutupi harga pembelian dan biaya terkait akuisisi, menurut sebuah pernyataan pada hari Senin. Qualtrics, yang membuat perangkat lunak untuk mensurvei pelanggan dan menganalisis sentimen karyawan, mengharapkan pendapatan setahun penuh 2018 melampaui $ 400 juta dan memproyeksikan laju pertumbuhan ke depan lebih dari 40 persen.
Qualtrics sebelumnya telah mengajukan IPO senilai $200 juta. Itu sama senilai $2,5 miliar dalam putaran pendanaan swasta 2017 dan pelanggannya termasuk Microsoft, JetBlue Airways dan General Electric, seperti dilansir dari The National , Senin (12/11/2018). Transaksi dengan SAP diperkirakan akan ditutup pada paruh pertama tahun 2019, dan Qualtrics akan beroperasi sebagai entitas dalam grup bisnis cloud SAP.
CEO Qualtrics Ryan Smith akan terus memimpin perusahaan, yang akan mempertahankan markas ganda di Utah dan Seattle, Washington. Qualtrics disarankan pada transaksi oleh Qatalyst Partners dan Goodwin Procter. JP Morganacted sebagai penasihat keuangan dan Jones Day bertindak sebagai penasehat hukum untuk SAP.
Tag: SAP SE , Qualtrics International Penulis/Editor: Hafit Yudi Suprobo Foto: Reuters/Ralph Orlowski
The tech industry’s newest billionaires are a pair of brothers who started a software company in their parents’ basement in Utah. Now Ryan and Jared Smith are selling Qualtrics International Inc. to European giant SAP SE for $8 billion—and they’ll get to keep running the business.
Ryan, 40, is the chief executive and public face of a startup that—unusually—resisted taking venture money for over a decade before finally agreeing to deals with Accel and Sequoia Capital. Last valued at $2.5 billion, Qualtrics makes customer-survey software used by the likes of Microsoft Corp. to General Electric Co., helping boost its revenue more than eight-fold over the past seven years.
Smith is something of a fixture in a Utah startup scene that encompasses Ancestry.com, Insidesales.com and recently listed Domo Inc. His ardor for the Beehive State means Qualtrics is a supporter of such events as the Silicon Slopes Utah conference, which showcases local companies as well as the region’s snowboarding and skiing. Ryan, who reportedly once turned down a $500 million offer for his company, his family members and other major shareholders are now poised to get about $7 billion for their shares. Not bad for a CEO who got paid $100,000 in salary last year.
“You do not forget your first meeting with Ryan Smith,” Sequoia Capital partner Bryan Schreier wrote in a blog post. “A go-to-market savant, Ryan complements his brother’s understated-engineer mindset. But they, their father Scott, and their co-founder Stuart, clearly have a shared set of values.”
Qualtrics had filed for an initial public offering in the U.S. and was planning to raise about $500 million. SAP CEO Bill McDermott preempted the IPO with an all-cash offer that was more than 75% higher than the company’s projected valuation. McDermott said in a conference call that SAP had to pay up because Qualtrics roadshow was going well.
Ryan is known as the more gregarious and outgoing in a family of brainiacs — both his parents held doctorates and his father lectured about market research at the University of Oregon. The Smiths moved to Utah around the time Ryan’s father opted to work at Brigham Young University, and in 2002, the pair started Qualtrics, originally targeting academics that needed to conduct field research. “We figured that if you could serve them, you could serve anybody,” Ryan told Bloomberg News in a 2013 interview.
As the company grew, Ryan eventually convinced his brother to quit a product director’s job at Google and run the technical side of things. Jared, now 43, is the company’s president. The Smith patriarch—a cancer survivor—came up with the idea to serve his fellow academics, while Jared wrote the code and Ryan sold it to customers.
“We just said, hey, there’s no rules. There’s no playbook,” Ryan said in an interview conducted for an Accel series profiling entrepreneurs.
Qualtrics’ approach is based on what it calls “experience management” or XM, according to Sequoia’s Schreier. That involves analyzing every aspect of the customer experience to drive loyalty and referrals, which it deems crucial at a time when social media gives individuals more power than ever to speak out.
That approach worked. Qualtrics expects 2018 revenue in excess of $400 million and forecast a forward growth rate of more than 40%. Ryan and his family hold 87.6% of Qualtrics through a holding company managed by the two siblings and father Scott. That’s worth about $7 billion based on SAP’s purchase price— though it’s possible other family members own shares as well.
Ryan will continue to run the company as an entity within SAP’s larger cloud business group, maintaining headquarters in Utah’s Provo as well as Seattle. That allows the Smith family to retain a formula that’s served it well. Sequoia singled out the company for running on its own money at the start, eschewing the cash-burning common to Silicon Valley’s hottest outfits—a phenomenon that often requires multiple rounds of outsized funding.
After college, Ryan said he wanted adventure and went to South Korea to teach English. One of his early lessons in entrepreneurship came there. While most foreign tutors were scraping by on next to nothing, he decided to try private tutoring by putting flyers offering his teaching services in mail boxes.
“I put those in, like, 5,000 apartments within a couple week period. I ended up making a lot of money,” he said in the video. “That was one of my early, better actions. Hey wait, there’s another way of doing this and it worked.”
Qualtrics’ other unusual element is its home base, far from a Bay Area regarded as the cradle of the American tech industry. The family-owned business has become deeply involved in everything from sponsoring the Utah Jazz to local philanthropic initiatives. Ryan, a Mormon, has often spoken publicly about his state’s potential.
“It’s awkward for a lot of people here,” Ryan said, citing a lack of diversity and lifestyle quirks. “We need to make it easier for people to be here, because we have all the makings to make this a major tech hub.”
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caption SAP CEO Bill McDermott source Ralph Orlowski/Reuters
SAP announced on Sunday that it was acquiring IPO-bound startup Qualtrics for $8 billion in cash.
Qualtrics was on track for an IPO that would have valued the company at $4.8 billion in the middle of its price range.
But McDermott, who had been talking with Qualtrics CEO Ryan Smith for months, was insistent, and eventually came up with an offer that the startup couldn’t refuse.
Qualtrics offers comprehensive market research and data analysis cloud software that complements SAPs offerings.
Not only is it a fast-growing company, but it was also profitable, all of which helps SAP justify its premium price.
SAP announced on Sunday that it plans to acquire IPO-bound startup Qualtrics for $8 billion cash.
Qualtrics was on the verge of its IPO – it was even on its roadshow with potential investors this past week. It had expected to raise about $495 million in its IPO and at the midpoint of its $18-to-$21 price range, it would have been valued at $4.8 billion.
And the roadshow was going well, said Qualtrics CEO Ryan Smith in a press conference with SAP CEO Bill McDermott on Sunday. All signs pointed to a very successful first day of trading and beyond, because Qualtrics had been cash-flow positive for most of its history even amid its rapid growth, and it was reporting a net profit, said Smith. It had earned $289.9 million in revenue in 2017, up 52% from its $190 million in revenue in 2016 and reported a net income of $2.5 million, up from $12 million in losses in 2016.
caption Qualtrics founder CEO Ryan Smith source Qualtrics
“Our IPO was going extremely well,” Smith said on the call. “We were the only show on the road last week and it was going as well as any IPO of … a cash positive high-growth company.”
“We chose to be here,” Smith said of the acquisition.
SAP Bill McDermott doubled down on the idea, saying, “Ryan is being modest. I happen to know this was going to be the most successful IPO of 2018. He’s oversubscribed.”
All of that helps to explain why SAP is paying quite a premium for Qualtrics, which was valued at $2.5 billion at the time of its last private fundraising.
The two said on the phone that SAP had been in talks with Qualtrics for “a few months,” with Smith claiming that McDermott “really chased it down.”
With Qualtrics, McDermott is buying growth in the oh-so-important cloud software market. SAP is best known for its financial software, known to the industry as enterprise resource planning (ERP). It is the world’s largest supplier of ERP software, competing with the likes of Oracle.
But SAP is also going head-to-head with just about every other big cloud software player as well, including market and sales software. Qualtrics complements SAP’s flagship offerings, the same way that LinkedIn complements Microsoft’s customer relationship management (CRM) strategy.
Qualtrics is itself the leader in online market research software. And it has been repositioning itself into a new market that Smith has dubbed “experience management.” By that, he means helping companies get a complete world of their perception and performance, as seen by customers, employees, partners, and anyone else whose opinion matters for your business.
McDermott says of the Qualtrics deal that “this is the No. 1 most transformative thing I’ve ever been involved in.”
He explained the premium price tag in a more practical matter, too. “This is less of a multiple than others in the industry have done, but it’s the largest as far as the growth that we could realize from it. We’d have to do a whole lot of tuck-ins to do what we have one in one move here.”
He is, perhaps, referring to the surprise huge acquisition in the enterprise software world of IBM’s blockbuster planned purchase of Red Hat for $34 billion. Pound-for-pound, it definitely seems that SAP is paying less than IBM did to achieve growth of its own.
