PROVO — It takes some serious audacity to look an offer of $500 million in the face and walk away.
But that's exactly what Qualtrics co-founder and CEO Ryan Smith did back in 2012, deciding that cashing out on a company that's created an entirely new "customer experience" product category, even for half-a-billion dollars, was not the end goal.
Now the company is on the cusp of launching what could be the state's most valuable public stock offering ever, following a filing late last week with the U.S. Securities and Exchange Commission.
The platform that Smith launched with his brother in 2002 as a tool for academic researchers has evolved into a tech behemoth that leverages survey input and a business analytics engine to let its clients, now numbering over 9,000, know exactly how well, or not, their companies are performing.
Smith and his team built Qualtrics via a path that's become a rarity in the tech realm — "bootstrapping" or self-financing growth and product development for an entire decade before finally accepting venture capital input. Since then, Qualtrics has brought in some $400 million in venture financing and, following a $180 million round in 2017, had earned a valuation of $2.5 billion.
Industry watchers say that valuation has likely grown, and data provided by the company in its SEC S-1 filing reflects a company performing at a very high level, with annual revenue growing over 50 percent from $190.6 million in 2016 to $289.9 million in 2017. The company also surged into profitability in the same time period, turning $12 million in losses in 2016 to $2.6 million in positive cash flow in 2017.
For now, Qualtrics has not yet listed details about stock pricing or number of shares being offered, currently using what is likely a placeholder of $200 million for an aggregate offering. The S-1 filings typically indicate a company is within a few months of a stock sale and can also be updated and modified as part of the process.
While Qualtrics representatives are forbidden from discussing their IPO plans under an SEC-mandated "quiet time" that kicks in when an S-1 filing is made, Smith told the Deseret News last year following the $180 million Series C funding that his company would break records whenever it made the jump to public entity and expressed his support of Utah's bigger tech realm.
"If we went public today, we'd be the biggest IPO in Utah history," Smith said at the time. "But I love it when Utah succeeds as a state … and I'd love it if every one of our Utah tech companies continue to grow and go where no one has gone before."
Qualtrics' filing also self-fulfills a prognostication Smith made in January at the 2018 Silicon Slopes Tech Summit that Utah could see multiple public stock offerings coming out of homegrown tech companies. So far this year, Farmington's cloud-based tech education company Pluralsight went public in May, and American Fork business intelligence/analytics company Domo hit the public markets in June.
Pluralsight co-founder and CEO Aaron Skonnard offered Qualtrics and Smith a shoutout on the IPO news in a Tweet last week:
Silicon Slopes Executive Director Clint Betts noted Smith has not only shown his leadership and innovation in the world of tech innovation, but leveraged his standing in the business world in the fight against cancer, a disease his father was battling when the idea for Qualtrics came to fruition back in the early 2000s.
"Qualtrics is one of the crown jewels of Silicon Slopes, and Ryan Smith is one of the most innovative and impressive leaders in all of tech," Betts said in a statement. "His legacy will extend beyond the incredible company he's built to the impactful ways he serves and gives back, most notably with 5 For The Fight and his relentless drive to eradicate cancer. We're excited to celebrate this next milestone in the company's journey, and we're looking forward to celebrating many more in the future."
Qualtrics' 5 for the Fight campaign is aiming to raise $50 million in the fight against cancer, and Smith made the decision to help promote the effort through sponsoring a Utah Jazz jersey patch. His decision to support his philanthropic effort, in lieu of his company, through the multi-million dollar deal was widely lauded, particularly as almost every other NBA jersey logo deal was tied to corporate sponsors.
In a letter included in the SEC filing signed by Ryan and Jared Smith, the brothers underscored the goals that have driven the company's success over the last 16 years:
"Our mission is to help organizations leverage experience management to turn their customers into fanatics, employees into ambassadors, brands into religions, and products into obsessions. From our earliest days, we knew that if we were going to do something special we had to write our own playbook, not follow someone else's."