Raise your hand if you dutifully fill out every survey you get.
That’s what I thought.
SurveyMonkey, a provider of web-based surveys, is thriving though, with 65 million monthly visitors visiting its website to respond to, create and in some cases just gawk at its surveys.
What is all that activity worth? A valuation of $1.35B, based on the latest round of financing that SurveyMonkey is raising from a who’s-who of companies and investment banks:
On Thursday, the company announced a $444 million fund-raising round that it closed in December, drawing in investors like Google and the hedge fund Tiger Global Management. And it plans to raise $350 million in debt, in a round led byJPMorgan Chase.
Naturally, one wonders about the viability of the business model, how the company makes money and the other stuff that follows such an eye-popping valuation.
While it was difficult to find all the details, its apparent that SurveyMonkey has three things going for it:
Per the DealBook article excerpted above, it has 360,000 paying customers that pay anywhere from $17 a month to $65 a month. Assuming that the average customer pays $32 a month, that’s 360,000 * $32 = $11.5m a month, or $138 million of operating revenue a year.
Since the company itself is run quite leanly and the IT infrastructure delivering all of these surveys is likely not that expensive, I would guess that they generate at least $100m in operating income a year.
Not bad for a survey purveyor…