Question: How do you acquire your biggest rival if you don’t have the cash? Answer: Partner with a private equity firm. SurveyMonkey has done just that, buying MarketTools’ products Zoomerang, ZoomPanel, and TrueSample through a partnership with TPG Capital.
The deal gives MarketTools’ other businesses and a minority stake in SurveyMonkey to TPG, while SurveyMonkey gets the 3 products and their 1.7 million survey users, 2.5 million panel respondents, and technology to weed out false responses. The playfully named SurveyMonkey will gain legitimacy from the acquisition, as 80% of the Fortune 500 are MarketTools clients.
SurveyMonkey closed a $100 million round of senior debt financing in November 2010 to reduce interest rates and prep for acquisitions. Some of that went towards buying a 49.9% stake in Salesforce.com AppExchange survey provider Clicktools in January 2011. At the time, SurveyMonkey said it was actively evaluating additional opportunities to partner and invest in “complementary businesses and geographies”. MarketTools fits that bill perfectly, allowing SurveyMonkey to roll users and technology directly into its existing product line.
Online survey business Zoomerang’s 1.7 million users will be added to the 9 million already utilizing SurveyMonkey’s core product that allows for easy, highly customizable online survey creation and distribution. SurveyMonkey promises that Zoomerang service won’t be interrupted, as “all existing surveys should remain fully functional, including those embedded in websites or housed on third-party platforms such as Facebook.”
The ZoomPanel acquisition will grow SurveyMonkey’s fledgling online panel service from 500,000 panelists to a total of 2.5 million, making it significantly more valuable to businesses looking to conduct deep market research. TrueSample will help improve the quality of SurveyMonkey’s research by removing fake and duplicate responses, terminating disengaged respondents, and verifying survey accuracy through SurveyScore’s technology.
The TPG Capital – SurveyMonkey deal was quite complicated. First, TPG acquired MarketTools, but then transferred its 3 relevant products to SurveyMonkey. TPG will keep and expand MarketTools’ Research Solutions and CustomerSat businesses. In exchange for the products, DealBook’s Evelyn Rusli reports TPG receives a 10% stake in SurveyMonkey valuing it at $1 billion.
SurveyMonkey will now be able to better leverage its free or cheap survey product to generate leads for its expanded B2B market research business. The MarketTools acquisition will help it convert college kids using free SurveyMonkey surveys for class into serious paying customers when they join big companies.
- SURVEYMONKEY
- TPG CAPITAL
- MARKETTOOLS
Started in 1999 by Ryan Finley and Chris Finley, SurveyMonkey is an online survey tool that enables people of all experience levels to create their own surveys quickly and easily. Every day, SurveyMonkey gives thousands of people the feedback they need to make more informed decisions, including 100% of the Fortune 100. SurveyMonkey’s offices are located in Portland, Oregon and Palo Alto, California.
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TPG Capital SM (formerly known as Texas Pacific Group ®) is a leading global private investment firm with $48 billion of capital under management across a family of funds. Since the firm’s founding in 1992, their investment philosophy has been to create value by investing in change – change created by industry trends, economic cycles or specific company circumstances. Their tradition of providing unique investment insight and value-added operating capabilities to companies undergoing change, as well as their comfort…
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MarketTools is the leading technology and solutions provider of customer insight management capabilities for the world’s market leaders through a combination of the leading survey platforms, research innovation and high-quality, global panels. We work closely with market leaders to generate winning ideas, greater product success and increased customer loyalty.
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