by Brenon Daly
Already valued at about $2bn in the private market, SurveyMonkey held that ‘double unicorn’ valuation as it debuted in the public market. The company priced its upsized offering above the expected range, and watched the freshly printed stock jump about 50% on the Nasdaq. Yet even with all that bullishness, the IPO was more about value confirmation than value accretion.
Still, the online survey provider does enjoy a rather healthy valuation. With roughly 125 million shares outstanding (on a nondiluted basis), Wall Street is valuing SurveyMonkey at about $2.25bn. That’s roughly nine times the 2018 revenue that we project for company. (Our math: So far this year, SurveyMonkey has increased revenue about 14%. Assuming that rate holds through the second half of this year, 2018 sales would come in at about $250m.)
In the IPO, the company raised $180m plus another $40m from a separate direct sale to Salesforce Ventures. That goes on top of the roughly $1bn that the company had previously raised in debt and equity. The company’s main backer, hedge fund Tiger Capital Management, still owns about one-quarter of the company. (In addition to being the largest shareholder of SurveyMonkey, Tiger is also its largest customer, according to the company’s prospectus.)
Having probably taken in all the financing it could reasonably expect to collect as a private company, SurveyMonkey might well look at today’s IPO as a necessity. (It will be using $100m of the proceeds to pay off its debt.) The fact that Wall Street investors received the dot-com survivor so warmly not only splashes a bit of liquidity in the 19-year-old company, but may have other companies of its scale and vintage also give a closer look at the public market. As everyone on Wall Street knows, you always want to sell into demand.