That's awesome news. Congratulations to the Wufoo team -- it is well deserved. (Their product is awesome.)
It is also great news for SaaS startup generally, since Wufoo is a little of column A and a little of column B on the typical grow via revenues VS get investment and grow massively dichotomy. That's a data point in the favor of at least some investors making investments in companies which have a projected trajectory where massive success results in a company on the scale of 37Signals/FogCreek/Wufoo rather than resulting in a company on the scale of Zynga/Groupon. $35 million won't exactly have VCs salivating but, oh well, if they don't invest they don't get a vote -- the angels and employees of Wufoo have to be happy like clams at this outcome.
The total amount raised, according to Crunchbase, was $118,000 (18000 YC + 100000 Angel). This was in 2006, so assuming there has been no other investments made, looks like their revenues must have been pretty decent to be able to support their operations.
If you consider a 10x multiple, revenues would have been in $3-4 MM range. Wufoo sets a great example for exits where VCs are not involved but are awesome for founders + employees.
The dollar-figure makes me wonder if there is a "valley multiplier" on startup valuations. These guys built a great business with epic growth outside of the valley with very little funding. Aside from their SaaS offering, they're doing $200k of commerce transactions PER DAY.
If they were in the Valley and had taken a few million in funding, would the price tag be different (i.e. much higher)? When I compare this exit to other 30-40M exits, Wufoo seems head-and-shoulders above the rest in terms of revenue/profit, proven growth, proven team, etc.
The other related question is: Is the multiplier "efficient"? In other words, if they took funding and HQ'ed in the Valley, say they would've had to dilute the founders from 33% to 23%. They'd also have a much bigger expense line around real estate and salaries. Would the Valley premium more than make up for all of that? I suspect that it would.
I pulled this from Startups Open Sourced. Here's the context:
Q: Did you ever do any other big changes or pivots?
A: Payment forms is a big feature that we have at Wufoo and that’s something we
even didn’t think about when we launched the service. It’s one of those things that our users ask us about, constantly. People are asking for payment integration like crazy; let’s just see what we can do to make it happen, and our payment integration is something that we’re really proud of—it’s this really easy way of assigning prices to different choices in the form fields, and a significant driver of revenue for us. Interesting fact: Wufoo has helped people collect over $100,000,000 worth of revenue for the users and we process probably about $200,000 in payments—in transactions—every single day. So Wufoo helps generate a lot of significant revenue for our users.
We needed to launch a product quickly the other week so created a new form with Google Checkout to process payments, I managed to turn this around in less than 30mins. For the week prior to moving to our Shopify site we processed just over £21k in transactions via Wufoo's form.
Yeah, survey monkey does $40M/year in revenue. The company took $100M in debt financing to pay the founders, and put cash in the company coffers. The $100 million was more of a tax-arbitrage deal than anything else. (In the US equity payments are double taxed, but debt service isn't)
I can believe there's the money, what I can't believe is why SurveyMonkey appears to be so entrenched, it's not a product that's hard to replicate (at least that's how it appears from the outside).
It also has a URL that really looks scammy. Whenever I see a mailing list mailout from Big Corporation X, and it has a SurveyMonkey URL, I think "this is pretty much the opposite of the professional image that they're trying to pitch." I don't know how they do it. I guess that's why I'm not making the mega-bucks ;)
However, it's a great exit for Wufoo, and congratulations to all of them.
Advertisers generally run surveys to gauge the effectiveness of branding campaigns, not adwords campaigns. Pay for performance ads (like adwords) are much easier to validate than what people buy on big properties for branding purposes.
The very fact that All Things Digital reposted this press release led to the story surfacing on the HN front page sooner than it might have otherwise.
Now, aside from the pure information brokering role, they aren't adding much in this case. The HN guidelines are right to suggest a submitter post the original source if at all possible.
Congratulations guys. I'd normally never want to see this happen, but survey monkey is a great home and it's a great fit. I'm proud that we pay for your service.
Interesting that they are (soon to be were) in Tampa, FL - not exactly a hotbed of tech startups. Definitely cheaper to be there, but is it easier or harder to draw talent?
So I am going to go out on a limb and take the Wufoo guys at their word.
I used Survey Monkey a bit on some grad projects, but wasn't too impressed by what I saw. I mean, it was ok...but wasn't Wufoo-esque.
I love Wufoo and the founders have tremendous credibility in my eyes. It is clear that they are VERY passionate and extremely intelligent. The thought and effort they put into everything they do - from Particle Tree to Treehouse to Wufoo - is awe-inspiring.
Given that they have not raised a ton of money, I can only assume that they decided to do this deal on their own initiative and not based on pressure from both PG & PB (both of their angels).
So it would seem that they know what they are doing.
I hope that this works out for the best. Although I am just a free user of their product, I have a lot of respect for the team and have learnt a lot from them.
I truly wish them all the best - even if it means they needed to sell.
I use both Survey Monkey & Wufoo daily at work, and consider both of them to be fantastic tools, which both could both use some love on the visual customization end.
Survey Monkey's visual customization is limited to changing colors and uploading a logo. With Wufoo - it's possible to generate custom CSS (or do completely custom forms with their API) - but much more difficult than (I feel) it should be.
So - congrats to both companies, and hopefully they'll now move in the direction of more & easier visual customization.
> customers frequently use Wufoo’s forms to process online transactions.
> a process that previously required hours of work by web developers can now be done by anyone with web access in a matter of minutes.
Can I ask a question of the Wufoo team? Do you attribute your success primarily to: allowing anyone to do what only web developers could do (targeting non-consumption); reducing the work from hours to times; or processing online transactions?
If I had to pick one of those, it would be reducing work. People will pay for something that makes their job easier / efficient. Knowing what people want is hard though. I personally attribute it to day after day of paying attention to the details in support, design and all other areas of a business, which slowly builds trust and paying users.
Of the three, my guess would be making web-form creation accessible to people who could not do it before. While it's great to save time, that's a percentage improvement; whereas making the impossible possible is of a different order altogether. It's also to get people to adopt if they haven't already invested in a way of doing it that is already working for them (even if it is inefficient etc) - change is hard when you have bigger problems to worry about. But that's just my guess - I'd love to hear from the wufoo team...
But I agree with you about the support, design etc. There are a few companies providing online forms. Technically, it's not that hard to do; and I had a quick play with a competitor, that seemed pretty good. So I guess the "what people want" above just defines the mini "industry" of online forms - if Wufoo's is within an industry, its success must be based on additional factors, like the ones you mention.
This one seems like a good fit to me. Both small companies (SM being larger, but still small, all things considered) so you don't see the massive guy swallow up the small guy. Complimentary businesses (we use both products). Great products (both are very good). Good people.
Seems to go against your past philosophy. If Wufoo is kicking ass (which they most definitely are) and their profits are healthy (how can they not be?), then why sell out?
Take money off the table? Investor pressure? With our powers combined?
Maybe I'm too critical, but it seems to contradict your past posts on acquisitions and I was really looking forward to some drama to read this afternoon. :)
Perhaps he's referencing to their post in response to Mint's acquisition [1]. I had the same response, although I don't use either service enough to have much validity behind my opinion: Wufoo seems to have been better executed than SurveyMonkey, at least from an UI perspective. That said, there's obviously more to this business than simply executing well.
Jason Fried's comments on the Mint acquisition could be summarized as dissapointment over Mint "selling out". That is, they were on a good trajectory to take out an incumbent institution, and instead of carrying that through, they took a payday and let the incumbent off the hook.
The situation with SurveyMonkey and Wufoo couldn't be more different. Neither is analogous to Intuit. Not by any stretch. Both companies are closer to start-up than they are institution.
They (at least DHH) often go on rants that acquisitions should not be a goal of a company, and that companies are always ruined when they get bought out (see their series of stories called: Exit Interview)
It is also great news for SaaS startup generally, since Wufoo is a little of column A and a little of column B on the typical grow via revenues VS get investment and grow massively dichotomy. That's a data point in the favor of at least some investors making investments in companies which have a projected trajectory where massive success results in a company on the scale of 37Signals/FogCreek/Wufoo rather than resulting in a company on the scale of Zynga/Groupon. $35 million won't exactly have VCs salivating but, oh well, if they don't invest they don't get a vote -- the angels and employees of Wufoo have to be happy like clams at this outcome.