SVMK Inc. the parent of popular online survey system SurveyMonkey listed on the Nasdaq on September 26, 2018 after a wildly successful initial public offering. The company not only increased the number of shares it offered through the IPO but also pegged the price range higher after solid demand, raising close to $180 million. Shares jumped close to 60% higher in the very first few minutes of trading.
Founded in 1999 at the height of the dot-com boom, SurveyMonkey has managed to not only survive while many of its competitors and peers floundered, but also to thrive. After nearly 20 years of flying largely under the radar, SurveyMonkey is now grabbing the attention of many in the financial world. Potential investors may be left wondering, however, exactly how this company makes money.
Free or Premium Modes
SurveyMonkey offers what's called a "freemium" model according to the company's website. This means that users can choose to opt for a free set of survey services or for a more powerful platform that requires a paid membership. As the company suggests, "we allow users to use our most basic tools for free, while designating our more advanced features and resources to our paid plans."
Users opting for the free SurveyMonkey services are able to generate surveys of up to 10 questions and 100 responses, and they are able to use some of the basic data processing tools. SurveyMonkey sees the free service as a way for customers to sample their products and to become acquainted with the feedback collection process in general.
The paid side of the freemium model offers users with many more options, including various types of survey logic, unlimited access to filters and crosstabs and more.
Other Organization Solutions
While many users may only be familiar with SurveyMonkey's basic survey offerings, the company has introduced a host of business solutions and services as well. Some, like SurveyMonkey CX, are intended for customers, while others, like SurveyMonkey Apply, can be used by organizations and companies to deal with the process of creating and accepting applications for positions, awards and more.
In 2016, SurveyMonkey CEO Zander Laurie suggested that the company had a plethora of ideas and indicated that "the discipline is picking a few and not letting the others distract us." He added that the "core SurveyMonkey products are some of the most profitable and successful internet subscription products in history." At that stage, the company was focused on "creating business-grade solutions for customers that allow them to get more/do more with their survey results" and on "[leveraging] our scale and the data we're collecting."
How The Numbers Stack Up
According to its IPO filing, SVMK Inc. reported 2017 revenue of $218.8 million, almost 5.5% higher than the 2016 revenue figure of $207.3 million. For the first six months of 2018, that number stood at $121.2 million. The company was struggling with significant losses, however, it has managed to narrow those down over the past one year. Net losses for 2017 stood at $24 million versus $76.4 million in 2016.