Medallia Banks On Acquisitions

According to a recent report by Market Research Future, the global customer experience management market is estimated to grow at 22% CAGR to reach $18 billion by 2023. Earlier this year, Palo Alto-based Medallia (NYSE: MDLA), a leading player in the industry, went public. Its stock has had a tumultuous run so far. But the company isn’t too worried as it continues to consolidate in the industry with several acquisitions.

Medallia’s Financials

Medallia recently announced its second quarter results that surpassed market expectations. Revenues for the quarter grew 27% to $95.7 million, ahead of the market’s forecast of $91.32 million. Net loss was $38.3 million, compared to a net loss of $28.1 million a year ago. Adjusted net loss was $0.06 per share, ahead of the market’s estimate of a loss of $0.07 per share.

By segment, revenues from subscription services grew 24% over the year to $74.5 million and revenues from professional services grew 38% to $21.1 million.

Medallia’s Acquisitions

Medallia was founded in 2001 to build a service that could gather benchmarking data for services organizations such as hotels and compare the customer satisfaction levels at these organizations with those provided by other services within the same brand and by competitors. The husband and wife team of Borge Hald and Amy Pressman created a SaaS-based offering to gather feedback from multiple sources and provide real-time analytics to build visual dashboards so that organizations can improve customer experience. By integrating feedback from various media – web, mobile, and social networks, it is able to provide organizations with a holistic view of the customer.

Medallia has been expanding its offerings by acquiring several other smaller players. It has already made four acquisitions so far this year. In May this year, it announced the acquisition of customer success leader Strikedeck for an undisclosed sum.

Strikedeck offers a customer engagement platform that leverages technologies including workflow automation, machine learning, predictive analytics, usage tracking, surveys, and personalization. Its platform helps organizations integrate, manage, and obtain insights about their business processes and customer data. Companies can also use its platform to schedule and automate business review meetings, tasks, projects, and other events on a calendar.

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Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual incubator that aims to help one million entrepreneurs ...

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