Provo tech company Qualtrics announces $70 million venture capital infusion

Published: Tuesday, May 15 2012 5:36 p.m. MDT

http://www.qualtrics.com/

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Read more: Founder of Accel Partners talks investing in Qualtrics, other Utah companies

PROVO — Qualtrics, an online surveying and data collection software company, announced it has received $70 million from two major Silicon Valley venture capital firms Tuesday that will be used to expand its Provo headquarters and more than double its staff.

"We're planning on hiring 250 people in Utah," said company co-founder Ryan Smith, 33. "This is not the end, but just the beginning."

Accel Partners, backers of Facebook, and Sequoia Capital, which invested in Apple and Google, made the $70 million investment. It sets a record for the largest first-round investment in Utah, and will fund the expansion of the company's Provo office and increase its employee count from 200 to 450.

"We've kept a pretty low profile," Smith said. "I think that ended today."

Qualtrics has never issued a press release before Tuesday's announcement, but news of the investment attracted headlines from the Wall Street Journal and Forbes magazine, which called the company "Tech's Hidden Gem in Utah."

To make room for the 250 new employees, Qualtrics is renovating the second floor of the office building it is housed in that's tucked behind the the Shops at Riverwoods at the mouth of Provo Canyon. Surveying the barren floors and mess of desks pushed off to one side of the spacious room, Smith can envision the future of the company.

"We just started to rip everything out," he said.

He's thinking of installing a slide from the second floor to the first, an unconventional fixture for a corporate office, but it fits with the atmosphere at Qualtrics. The family dog, a labradoodle named Barnabus, freely roams the area, even sitting in the chair set up for Spencer Eccles, the executive director of the Governor's Office of Economic Development, before the press conference to announce the investments.

Qualtrics began in the basement of Smith's home. His father, Scott Smith, a Brigham Young University marketing professor, saw a lack of online research tools and decided to create his own software enabling users to conduct online surveys and statistical analysis. Along the way, he convinced another son, Jared, to leave his job at Google to help out.

The company has long since outgrown the basement, and moved out of its previous 6,000-square-foot office in 2011 for its current space. When renovations of the second floor are complete, Qualtrics will occupy a 72,000-square-foot area.

Qualtrics' first clients were universities, and a wall plastered in various universities' decals stands as a reminder of the importance of academia to the company. Today, Qualtrics has more than 600 universities as clients.

Among the decals is BYU's Y logo. Smith said Qualtrics hires a lot of BYU students and other locals, but he expects many of the new hires will not be limited to Utah Valley residents.

"We're definitely hiring a lot locally, but that's starting to really expand," he said. "There's a big pull from people to come to Qualtrics."

He said the recession provided an opportunity for the company to grow, as businesses started asking questions about what their customers wanted, and they turned to Qualtrics for the tools to answer those questions.

"Our business took off when the downturn happened," he said.

Scott Smith said one of the reasons for Qualtrics' growth and success is how easy it is to use the software to poll customers, collect data and conduct analysis.

"Qualtrics continues to be easy enough for an intern and sophisticated enough for a Ph.D.," he said.

In addition to working with hundreds of universities, more than 50 percent of Fortune 500 companies and hundreds of government and nonprofit organizations are Qualtrics clients.

"We're changing the world of business, of education, or government, of non-profit," Scott Smith said.

Gov. Gary Herbert, who spoke at the announcement, congratulated Qualtrics on its record investment, and said he expects the company to continue to grow and create jobs in the state.

"It's pretty much a landmark for us today," Herbert said.

Forbes named Utah the best state in which to do business two years in a row, and Ryan Smith said being in Utah "plays a big role" in Qualtrics' success, saying the state is "employer friendly" and has a lot of talent.

Smith said Qualtrics plans on hiring across all positions, including sales, software engineers and marketing.

E-mail: hschwarz@desnews.com

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