TPG Capital
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SurveyMonkey Acquires MarketTools’ Zoomerang, ZoomPanel, and TrueSample via TPG Capital

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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 some more legitimacy from the acquisition, as companies like Proctor & Gamble and General Mills rely on MarketTools’ research products, though SurveyMonkey already serves 99% of the Fortune 500.

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 sub-10% stake in SurveyMonkey valuing it at $1 billion.

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.

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.