The Guy Who Turned Down $500 Million For His Startup Just Landed $1 Billion Valuation
Ryan Smith, CEO of Qualtrics, feels validated. Investors just told him his company was worth $1 billion and they ponied up another $150 million in a series B investment to help him grow it even bigger.
That brings total funds invested to date to $220 million.
Two years ago, we reported that Smith took a giant gamble on himself and his family-run tech company. After about a decade of hard work, Qualtrics had bootstrapped its way into a profitable company generating just under $50 million in revenue, Smith told us. In 2012, he had about 200 employees and 3,800 customers.
And it was on fire.
Venture capitalists noticed. So did rival companies. At one point, he had a fistful of term sheets from VCs in one hand, and a $500 million acquisition offer in the other.
Qualtrics lets companies perform sophisticated employee and customer surveys in the cloud. The tech was created by Smith’s dad, Scott Smith, a well-known professor of marketing at BYU’s school of business.
Smith’s older brother, Jared, was also a big name in tech. He had left his prestigious job running Google’s Chinese technical operations to become his brother’s copilot, running Qualtrics’ engineering.
Their marketing was brilliant. With his dad’s name and connections, the Smiths targeted universities. “We signed up every business school we went after,” he said. Thousands of marketing students learned to use the research tool in school and then brought Qualtrics into their companies when they get hired.
When the Smiths were deciding their future, Sequoia’s Mike Moritz — backer of Google, Yahoo, and PayPal — swept in. He looked Ryan Smith in the eye and told him a half a billion dollars was nothing compared to the multibillion-dollar company Qualtrics could become.
Smith was 33 years old and he turned down the $500 million offer.
Since then, revenues have grown to “over $100 million,” he told Business Insider. He currently has 6,000 customers, 550 employees, and is expanding nationally and internationally. He just opened an office in Dublin, with offices in Sydney, Seattle, and Washington D.C. on tap.
“As a founder, you’re either the type that gets invigorated with every milestone, or you get less interested. For me the bigger we get, the more scrappier we get, the hungrier I get,” a jubilant Smith told Business Insider.
“I have to keep telling myself to look around and enjoy this. We sat in a basement and bootstrapped for 10 years so we can do this, be here. Now we have bunch of money, a ton of customers, and we’re dominating our market,” he says.