SAP to retain majority ownership of Qualtrics in IPO plans

27 Jul 2020

Image: © nmann77/

Less than two years after it acquired Qualtrics for $8bn, SAP has announced plans to launch an IPO for the XM firm.

On Sunday (26 July), German software giant SAP announced its plans to bring Qualtrics public. SAP acquired the Utah-based experience management (XM) company in January 2019 in a deal worth $8bn.

Less than two years later, SAP has revealed initial public offering (IPO) plans for Qualtrics in the US, while stating that it intends to remain the majority owner of the firm. SAP said that its primary objective for the IPO is to “fortify Qualtrics’ ability to capture its full market potential” in the XM space.

According to SAP, Qualtrics has operated with “greater autonomy” than other companies it has acquired. Following the IPO, the founder and current management team of Qualtrics will continue to operate the company.

Qualtrics founder Ryan Smith, who joined SAP after the 2019 acquisition and continued to lead the XM business, said: “SAP is an incredible partner with unprecedented global reach, and we couldn’t be more excited about continuing the partnership. This will allow us to continue building out the XM ecosystem across a broad array of partners.”

IPO plans

When SAP initially agreed to acquire Qualtrics back in 2018, the Utah-based company already had plans to go public. Those plans didn’t go ahead but SAP said it still recognised the potential of an IPO.

SAP currently owns 100pc of Qualtrics shares and said that it has “no intention” of spinning off or otherwise divesting its majority ownership interest. Smith is expected to be the largest individual shareholder.

SAP CEO Christian Klein said: “SAP’s acquisition of Qualtrics has been a great success and has outperformed our expectations with 2019 cloud growth in excess of 40pc, demonstrating very strong performance in the current set-up.

“As Ryan Smith, [SAP president] Zig Serafin and I worked together, we decided that an IPO would provide the greatest opportunity for Qualtrics to grow the experience management category, serve its customers, explore its own acquisition strategy, and continue building the best talent.”

SAP will remain Qualtrics’ largest go-to-market and research and development (R&D) partner, but the business will have greater independence to broaden its base by partnering and building out the XM ecosystem.

The two companies said that the final decision on the IPO and its conditions and timing will be subject to market conditions. As SAP will continue to fully consolidate the XM firm, the transaction is not expected to have an impact on SAP’s 2020 or longer-term financial targets.

Kelly Earley was a journalist with Silicon Republic