Photo Credit: Web Summit/Flickr.com

According to the CB Insights’ Fifth Annual Tech IPO Pipeline Report, there were only 14 tech IPOs in 2016 and that number is expected to rise in 2017. Heading its Top 5 IPO Prospects list is survey software unicorn Qualtrics.

Qualtrics’ Offerings

Provo, Utah-based Qualtrics was founded in 2002 by father-sons trio – Scott Smith and his sons Ryan and Jared Smith. The idea for Qualtrics came about back in the 1990s, when Scott Smith, a professor of marketing at Brigham Young University, was working on a consulting project for BellSouth that made him realize the need to speed up market research using the Web. A few years later, Scott, now recovering from radiation treatments for throat cancer, started contracting college students to build online survey software.

For the next three years, Qualtrics sold its solution to graduate schools. It worked with doctoral researchers who were working on sophisticated problems and needed surveys that could mask the real focus by asking varied questions. The result was a software that could meet the needs of students’ thesis ideas. After that, the route to the corporate marketing world appeared much simpler.

Today, Qualtrics is a Software-as-a-Service company that claims to be among the world’s leading insight platforms. Its solution simplifies and accelerates the process of capturing customer, employee, and market insights in a single place, thus helping its clients make informed business decisions.

Qualitrics began by focusing on schools, but it is now being used by global enterprises across industries including government agencies. Its customer list includes more than 8,500 enterprises globally, which includes 65% of the Fortune 100. It has over 1,200 employees and its platform hosts over 2 million active customers daily.

Qualtrics distinguishes itself from competitors like SurveyMonkey by focusing on corporate needs. Last year, it released a new product called Qualtrics Insights Platform that integrates the customer and employee research tool to deliver more comprehensive data insights.

In May 2016, Qualtrics made its first acquisition, that of San Francisco-based Statwing for an undisclosed sum. Statwing makes web-based statistical analysis software and Qualtrics plans to integrate it into the Qualtrics Insight Platform to make statistical analysis faster and easier for its customers.

Qualtrics’ Financials

Qualtrics bootstrapped first to revenue and profits for ten years before it raised any financing. By 2012, it was doing $50 million in revenue and $30 million in profits.  In 2014, the company’s revenues had more than doubled to over $100 million and is estimated to have generated more than $125 million in 2015 while remaining profitable.

In May 2012, the company finally accepted a $70 million funding from Accel and Sequoia. In 2014, Qualtrics raised its second and last round of funding for $150 million from Accel and Insight Venture Partners at a valuation of $1 billion.

In preparation for going public, Qualtrics hired veteran Microsoft executive Zig Serafin as its COO in October 2016.

Qualtrics is setting a wonderful example for startups. It has focused on its core fundamentals: customers, revenues, and profits. It was only after it became successful at that has it raised venture funding. It has gone to VCs as a king, not a beggar. It is now truly ready for the next stage – an IPO. That is why it is now a hot prospect.

In its competitive landscape are also smaller players like SurveyGizmo, a Colorado-based bootstrapped and profitable company that is growing nicely. I interviewed their CEO Christian Vanek at my recent roundtable.