Public Markets

Experience Monitoring Company Medallia Files To Go Public

Filing its S-1 paperwork with the SEC late last week, customer survey and experience monitoring company Medallia made public what’s been rumored for a couple of months: its intent to float its shares on public markets.1

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At this time, the filing states the company intends to raise $100 million in its initial public offering (IPO); however it should be noted that this is a pro forma figure many companies use to calculate registration and other fees incurred during the IPO process. The number and price of shares in the offering is not yet disclosed, but it’s likely that this filing will be amended with additional information as Medallia’s debut date draws nearer.2

At its last private-market funding, a $70 million Series F round announced in January, the company was valued at approximately $2.4 billion, post-money.

Medallia discloses that it generated roughly $261.2 million in total revenue (combining income streams from its subscription product and professional services offerings) and a net loss of $70.36 million in the year ending Jan. 31, 2018. In the year ending Jan. 31, 2019, the company incurred a net loss of $82.2 million (up 16.8 percent) on total revenues of $313.6 million (up 20 percent), signaling business growth and improving margins.

In its time as a privately-held company, Medallia raised at least $325 million in venture capital funding, according to Crunchbase data. Sequoia Capital led Medallia’s funding rounds since the company’s Series A, which was announced in January 2011. The company was established in 2001.

Medallia’s S-1 filing states on page 160 that Sequoia Capital is its largest shareholder prior to the offering, with over 44.4 million shares representing 41 percent of the company’s stock, of which nearly 8.98 million shares (8.3 percent) are owned by Sequoia Capital general partner Doug Leone through his partnership interests in the firm’s various funds.

The company’s two cofounders, married couple Amy Pressman and Borge Hald, hold just over 16.66 million shares, equal to 15.1 percent of the company’s stock for each individual. Pressman is currently a board member of Medallia, after serving as its president between its inception in 2001 and August 2018; she remains on the company’s board. Hald served as CEO until August 2018, when current chief executive Leslie Stretch took over as CEO to lead the company to its IPO. Hald currently serves as chairman of Medallia’s board and as its chief strategy officer.

The company’s third cofounder, Ulrich Stern, holds 7 million shares representing 6.5 percent of the company. Stern served as CTO of Medallia between July 2001 and April 2007, according to his LinkedIn profile.

Medallia intends to trade under the symbol MDLA on the New York Stock Exchange. Citigroup, Wells Fargo, Credit Suisse, and BofA Merrill Lynch are the principal underwriters of the transaction.

As Wall Street’s appetite for SaaS companies continues, we’ll be sure to keep an eye out for updates to this offering.

Illustration: Li-Anne Dias

  1. Back in mid-May, Medallia announced that it had confidentially submitted a draft registration statement to U.S. securities regulators.

  2. This being said, the filing discloses on page 37 that between “February 1, 2019 to April 5, 2019, the Company granted 1,309,700 RSUs and options to purchase 478,278 shares of common stock at an exercise price of $12.63 per share.”

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