Deal: Qualtrics Buys CX Startup Clarabridge For $1.1B

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Months after getting spun out of SAP into a separate public company, Qualtrics, a major provider of online survey software, has made a major acquisition. It’s agreed to buy Clarabridge, a startup that does similar work to Qualtrics in the field fondly referred to as “customer experience (CX)”.

  • Qualtrics will pay $1.1bn all with shares to buy Clarabridge. The acquisition is a major strategic play for the company, pairing Qualtrics’ customer survey business with Clarabridge’s similar business of measuring customer sentiment from various sources like social media posts and customer support calls.
  • Basically, Qualtrics is in the business of weighing customer surveys directly and Clarabridge in the business of doing so indirectly. Pairing both businesses represents a major strategic play for Qualtrics.
  • In an investor presentation, Qualtrics said that Clarabridge has $100mn in annual revenue, implying an 11x multiple that it’s paying to buy the company. That’s a usual multiple with software acquisitions of this era.
  • Clarabridge was founded in 2006. It has raised some $125mn in funding from investors including General Catalyst, Summit Partners, and Boulder Ventures.
  • Notably, Qualtrics (NASDAQ: XM) is spending about 5% of its market cap to buy Clarabridge, implying seriousness. The acquisition is expected to be completed in the fourth quarter of this year.

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