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.
SurveyMonkey Inc. is the world’s largest survey company, helping customers collect over 1.5 million online survey responses every day. SurveyMonkey has revolutionized the way people give and take feedback, making it accessible, easy and affordable for everyone. The company was founded in 1999 with a focus on helping people make better decisions, and has built technology based on over 10 years of experience in survey methodology and web development. Customers include 99% of the Fortune 500, academic institutions, small...
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...
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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