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Two years on, Utah’s Qualtrics makes $15B splash in public markets

Qualtrics’ founder and executive chairman Ryan Smith, left, and company CEO Zig Serafin, right, ring the opening bell for the Nasdaq stock exchange from Qualtrics’ headquarters in Provo early Thursday, Jan. 28, 2021.
Qualtrics

Unlike two years ago when Utah customer experience innovator Qualtrics was snapped up for $8 billion just days before a planned public stock offering, the company actually made it to the finish line Thursday with a deal that raised over $1.5 billion on a spectacular new valuation.

Some market watchers criticized German software giant SAP for paying too much for Utah-born Qualtrics back in 2018 but the current spinoff effort, and an attached Qualtrics valuation north of $15 billion, is casting the deal in a new light of genius.

The deal comes just weeks after Qualtrics co-founder and current executive chairman Ryan Smith was announced as the new majority owner of the Utah Jazz after closing a deal rumored to be worth $1.6 billion.

Smith and Qualtrics CEO Zig Serafin had a never-before moment Thursday morning when they rang the Nasdaq stock exchange opening bell from the company’s headquarters in Provo. Qualtrics’ stock, trading under the XM symbol, is expected to appear on the trading board sometime Thursday morning.

Ryan Smith, Qualtrics CEO, walks across the stage speaking during the Qualtrics X4 Summit at the Salt Palace Convention Center.
Qualtrics co-founder Ryan Smith speaks during the second day of the Qualtrics X4 Summit at the Salt Palace Convention Center in Salt Lake City on Thursday, March 7, 2019.
Steve Griffin, Deseret News

SAP is set to retain about 80% of the company, Smith comes through the deal as the largest individual stockholder and private equity group Silver Lake Partners spent $550 million to acquire 4% of the company ahead of the stock launch.

Initially conceived of as a survey tool for academics, Qualtrics morphed into a set of tools and deep data analysis optimized for assessing clients’ business vitality, as viewed through the eyes of their clients and/or employees. This new set of analytics and insight theory has grown to become its own business category, and Qualtrics is both the progenitor and leader of the customer experience realm.

In an interview following news of the Jazz purchase, Smith said his plans were to continue leading Qualtrics, founded in Provo in 2002, alongside his new responsibilities as Jazz owner. Ryan and brother Jared Smith launched the company together based on technology first developed by Ryan Smith and his father, BYU researcher and professor Scott Smith, amid the elder Smith’s fight (it was successful) against throat cancer.

Qualtrics’ founder and executive chairman Ryan Smith, seated, and company CEO Zig Serafin, standing, are pictured right after ringing the opening bell for the Nasdaq stock exchange from Qualtrics’ headquarters in Provo early Thursday, Jan. 28, 2021.
Qualtrics

In its filing, the company said it now has a client list numbering more than 12,000 and employs over 3,300 people in 25 countries with co-headquarters operating in Provo and Seattle.

Qualtrics has almost doubled its workforce since joining the SAP group and last fall announced plans for an expansive renovation of its Provo offices that will include a new, 40,000-square-foot day care facility. The company also occupies 275,00 square feet in a new downtown Seattle office tower that bears its name.

Qualtrics’ revenues have also grown under SAP ownership, with 2020 revenues up over 36% to $723 million over the 12 months ending in September, according to its SEC filing. The company believes its total addressable market is north of $60 billion.

Correction: An earlier version stated Ryan Smith held 1% of outstanding shares of Qualtrics stock as of Thursday. While Qualtrics indicated that figure in an earlier filing with the U.S. Securities and Exchange Commission, he has since expanded those holdings.