- SurveyMonkey priceD upsized 15 mln share IPO at $12 per share, above the expected $9-11 per share range (initially 13.5 mln shares). Closed its first day of trading 43.7% above its IPO price of $12.00/share.
- Sector: Technology
- Industry: Software - Application
- Full Time Employees: 857
- http://www.surveymonkey.com
Zander Lurie has been chief executive of SurveyMonkey since 2016, after taking over for the deceased Dave Goldberg.
David Goldberg was CEO of SurveyMonkey before he died in 2015. His wife, Facebook's Sheryl Sandberg, is on the company's board, and her trust holds a 10% stake.
Founded almost two decades ago, SurveyMonkey had more than 16 million active users in the last year, according to the IPO filing. The company, based in San Mateo, Calif., said more than 600,000 of its total users pay for its services.
In the first half of 2018, SurveyMonkey’s net loss increased to $27.2 million from $19.1 million in the same period last year.
In 2017 it had a net loss of $24 million on revenue of $218.8 million. That compared with a net loss of $76.4 million on $207.3 million in revenue in 2016.
Tiger Global Management holds the largest stage in the company, with 29% of the stock before the IPO.
The company has 600,000 paying customers, about 80% of which use the various survey products for business purposes. The company says 300,000 organizations use the software and that it is focused on turning nonpaying customers into paying ones.
The company logged second-quarter sales of $62.7 million, up from $53.5 million in the same quarter last year. For the calendar year 2017, SurveyMonkey booked revenue of $218.8 million, up from $207.3 million in 2016. Average revenue per user has also been climbing. For 2017 it was $362, up from $349 in 2016. And in the first six months of this year it was $400, up from $351 during the first six months of 2017.
The company offers a free version as a marketing strategy
Like Dropbox and other software businesses, SurveyMonkey offers a free version of its software that’s limited in its functionality, as well as self-serve only. The idea, as with others who use similar sales strategies, is that showing potential customers how useful the tools can be will entice them to buy the full version.
The company says that most of the company’s business historically has been driven by “organic adoption” and “viral growth” in large part because of the free users converting to paying customers. SurveyMonkey says that 80% of new individual paying customers arrive at the company’s website directly or via search. In the prospectus, SurveyMonkey wrote that most unpaid customers do not convert. The company says it is ramping up its sales force to encourage faster growth.
Cash, shrinking losses and debt
Unlike some companies that have gone public in recent weeks, SurveyMonkey has a fair bit of cash on hand — $43.4 million — and says it can operate for at least 12 months. SurveyMonkey reported a net increase of $8.2 million in cash for the first six months of the year, compared with $3.4 million in the year earlier period.
The company’s net losses have also narrowed sharply, logging $24 million in net losses for calendar year 2017, compared with losses of $76.4 million in 2016.
The company said it has a total of $322 million in debt on the books as of the end of June. According to the prospectus, the company will use part of the IPO proceeds to repay those debts. SurveyMonkey also said it would use some of the IPO money to repay tax obligations and to finance continuing operations.
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