SAP is buying Utah-based startup Qualtrics for $8 billion — days before its scheduled IPO

Brendan Moran/Getty ImagesQualtrics CEO Ryan Smith will keep his job after SAP’s acquisition closes.
  • SAP on Sunday announced its intent to buy Qualtrics for $US8 billion.
  • Qualtrics is a startup based in Utah that helps companies gather feedback and refine their products.
  • Qualtrics, which was last valued at $US2.5 billion, was days away from an initial public offering.
  • That IPO could have valued the company at $US5 billion or more right out of the gate.

SAP, the German database giant, on Sunday announced an $US8 billion all-cash deal to acquire Qualtrics, a startup based in Utah that was last privately valued at $US2.5 billion.

Notably, Qualtrics was scheduled to hold an initial public offering this week, which could have valued the company at more than $US5 billion right out of the gate, according to the company’s most recent filings. The deal is expected to close in the first half of 2019.

Qualtrics specialises in what it calls experience management, or XM, providing tools to help companies gather feedback and optimise their products.

After the deal closes, Qualtrics will maintain its headquarters in Seattle and Provo, Utah. Qualtrics CEO Ryan Smith will continue in his role as well.

Qualtrics is something of an anomaly in the world of high-flying tech startups. Founded in 2002 by Smith and his father, a professor of marketing at Brigham Young University, the company didn’t accept any venture funding until it had been in business for a decade. Qualtrics raised $US400 million in total venture-capital funding from investors including Accel and Sequoia Capital.

Over the years, the younger Smith has earned a reputation for having an eccentric brand of generosity. At one point, Qualtrics paid to sponsor the NBA’s Utah Jazz and had the team wear a patch promoting its “5 for the Fight” cancer-research campaign. At another point, the company loaned a customer a Tesla Model X.

The deal comes shortly after IBM announced its intent to purchase Red Hat, an open-source-software provider, for $US34 billion. Microsoft too just closed its $US7.5 billion acquisition of the code-sharing service GitHub, making this a banner year for mergers-and-acquisitions action in the business-to-business tech sector.

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