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Qualtrics CEO Ryan Smith. Photo: Clodagh Kilcoyne/Getty Images

SAP on Sunday night announced that it will purchase Qualtrics, a U.S.-based maker of survey software that had been expected to go public this week, for $8 billion in cash,

Why it matters: This would be the largest-ever purchase of a VC-backed enterprise software company, and the third-largest sale of any SaaS company (behind Oracle buying Netsuite for $9.3 billion, and SAP buying Concur for $8.3 billion).

SAP CEO Bill McDermott said in a conference call that the Qualtrics IPO was already over-subscribed, and that this deal will be as transformative for SAP as buying Instagram was for Facebook — with SAP being able to merge its massive trove of operational data with Qualtrics' collection of user experience data.

He also says discussions between the two companies have been ongoing for just a few months.

  • Qualtrics will continue to be led by co-founder and CEO Ryan Smith, and maintain its dual headquarters in Provo, Utah and Seattle.
  • It recently set IPO terms to 20.5 million shares being offered at $18-$21 per share, which implied that the company would seek at least twice the $200 million for which it had initially filed. It also could have resulted in a valuation of around $5 billion, versus the $2.5 billion it received in its most recently round of venture capital funding.
  • Qualtrics turned a slight profit over the first nine months of 2018, and also claims to have been cash-flow positive for each of its 16 years.
  • The company reports around $1.5 million of net income on $290 million in revenue for the first three quarters, versus just under $1 million of net income on $207 million in revenue for the year-earlier period. It also turned a profit for full-year 2017.
  • It had raised around $450 million in VC funding, most recently at a $2.5 billion valuation, from firms like Accel, Insight Venture Partners, and Sequoia Capital.

This is the second time this year that a "unicorn" enterprise software company has been purchased just before its planned IPO. The first was Workday buying Adaptive Insights.

Go deeper

Dems race to address, preempt stimulus fraud claims

Illustration: Aïda Amer/Axios

Biden officials are working to root out the systematic fraud in unemployment and Paycheck Protection Program claims that plagued the Trump administration’s efforts to boost the economy with coronavirus relief money, Gene Sperling told House committee chairmen privately this week.

Why it matters: President Biden just signed another $1.9 trillion of aid into law, with Sperling tapped to oversee its implementation. And the administration is asking Congress to approve another $2.2 trillion for the first phase of an infrastructure package.

1 hour ago - Politics & Policy

Scoop: Biden close to picking Nick Burns as China ambassador

Nicholas Burns. Photo: Alex Wong/Getty Images

Nicholas Burns, a career diplomat, is in the final stages of vetting to serve as President Biden’s ambassador to China, people familiar with the matter tell Axios.

Why it matters: Across the administration, there's a consensus the U.S. relationship with China will be the most critical — and consequential — of Biden's presidency. From trade to Taiwan, the stakes are high. Burns could be among the first batch of diplomatic nominees announced in the coming weeks.

Biden's Russian sanctions likely to achieve little

President Biden announces new sanctions against Russia. Photo: Chip Somodevilla/Getty Images

Despite bold talk from top administration officials, there's little reason to think the Russia sanctions package President Biden announced Thursday will do anything to alter Russian President Vladimir Putin's behavior or calculus.

Why it matters: While it's true some elements of the package — namely, the targeting of Russia's sovereign debt — represent significant punitive measures against Moscow, it leaves plenty of wiggle room for the Russian president.