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FEATURE30 January 2013

Cash in your chimps? Not yet, says Goldberg

Features News

With new analytics software and an international expansion on the cards, CEO Dave Goldberg says the time wasn’t right for SurveyMonkey to go public.

It values the DIY survey software company, which generated $113m in revenue last year and EBITDA of $61m, at $1.35bn. We spoke to CEO Dave Goldberg to find out why he avoided an IPO, why analytics is the firm’s next big bet and how new investor Google will help SurveyMonkey achieve its international ambitions.

Research: What does this recapitalisation mean for the company?
Dave Goldberg:
The money didn’t go to the company. We used it to buy shares from existing investors and employees. There’s two parts to it: one is the equity – $444m from new investors – that went to buy shares from existing investors. Then the debt that we raised was used to buy back shares from investors and employees, allowing us to reduce the number of shares in the company to make each individual share more valuable.

“I think analytics for surveys has been one of those neglected areas. I don’t think there’s been a whole lot of innovation in the space”

So, it’s not extra cash in the pocket but how does it change the game for SurveyMonkey?
DG:
It won’t really change how we’re running the business and that’s exactly why we did it. The other option for us was going public and that would have changed things, as you guys can see from other public companies in the research space. As a public company you have to run your business on a quarterly basis, whereas we can make longer-term investments and think longer-term because we don’t have that pressure.

There was some discussion last year of how a lot of new technology companies and entrepreneurs are actively avoiding IPOs. Why is that? Is it just the pressure of making your quarterly numbers?
DG:
What’s changing is that companies are making the decision to go public a lot later. The costs of going public – both the actual costs, which can run at $3–$4m a year, and the costs to the way you run the business – mean that you can’t take a small company public anymore, effectively. I took my first company public. We weren’t profitable, we only had $12m in revenue, but we were seen as a very fast-growing opportunity. But that stage of public company just doesn’t exist anymore. Companies are going public later, when they are profitable and much larger.

SurveyMonkey has been around for 13 years. How far along the growth path do you see yourselves?
DG:
There’s been two stages to the company. It was started in 1999 by Ryan Finley and he built an incredible business. He decided in April 2009 to sell control of the company to a couple of private equity firms and myself and step back from the day-to-day running of the business. We only had 14 employees four years ago and so even though the company was fully successful and quite profitable, it wasn’t capable of being a public company back then. Now it would, but we chose not to.

OK, so if you’re not willing to go public yet and give up the ability to make longer-term investments, can you tell us where are you making those investments?
DG:
What you can see on our site today is that we have a whole new analytics platform that we’ve been slowly rolling out. We’ve seen a really nice uptake with that. I think analytics for surveys has been one of those neglected areas. I don’t think there’s been a whole lot of innovation in the space. Most of our users in the past were forced to download their results to Excel or SPSS and do the analysis there. Now we’ve given people the ability to do that kind of analysis on our site, in the cloud, and we can make it a lot more accessible and a lot more customised for survey analytics than, say, Excel is.

Google is a new investor in SurveyMonkey. Are there things you hope to share and learn from them, given their recent move into the consumer survey space?
DG:
We’ll have the ability to work with Google on a lot of things, but I don’t know that we’ll be working with the consumer surveys team. We’re most excited to get their help in scaling internationally. Today we have customers in 184 countries. We’re growing very quickly outside the US and we expect international work to be substantially more than half of our business eventually. But Google is by far the most successful international internet company out there so we definitely think we can learn a lot from them.

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