BY EVELYN M. RUSLI
SurveyMonkey is all grown up.
The online survey service announced on Wednesday that it had partnered with TPG Capital to acquire a rival, MarketTools.
Under the terms of the complex deal, TPG will transfer some MarketTools assets to SurveyMonkey and take a minority stake in the service. TPG’s investment — which represents less than 10 percent of SurveyMonkey’s total shares — values the company at roughly $1 billion, according to a person with knowledge of the matter, who spoke on the condition of anonymity because the deal terms were private.
The acquisition is a notable milestones for SurveyMonkey, founded 12 years ago by Ryan Finley, who operated the business out of his apartment in Madison, Wis., for several years. The company, which helps businesses and individuals build and analyze online surveys, has been profitable for some time.
It was a shoestring operation until 2009, when an investor group led by Spectrum Equity Investors and Bain Capital Ventures purchased a majority stake in the company. Under the terms of that transaction, David Goldberg, a former Yahoo executive and the husband of Sheryl Sandberg of Facebook, joined as chief executive and participated in the investment.
Over the past three years, the company has ballooned in size.
Its head count has grown from 12 to more than 100, while monthly unique visitors have roughly doubled, to 40 million, during the period. According to a statement issued on Wednesday, the company claims 99 percent of the Fortune 500, a list of America’s largest corporations, are clients.
Profitable and with some cash in the bank, SurveyMonkey has made a handful of acquisitions in the last few years. For examle, this year it purchased Infinity Box, an online form generator, for roughly $35 million in cash and stock.
Still, the acquisition of the MarketTools assets — which include Zoomerang, an online survey tool; ZoomPanel, a service to help organizations find respondents; and TrueSample, a quality control service — represents SurveyMonkey’s largest transaction to date. Zoomerang, previously one of SurveyMonkey’s largest competitors, will add about 1.7 million users.
“Our goal is to help people make better decisions with quality data,” Mr. Goldberg said in a statement. “Now, SurveyMonkey and Zoomerang customers will be able to offer surveys to panels of three million people and use TrueSample’s powerful technology to ensure the quality of their research.”
The transaction is also a significant one for TPG, as it becomes increasingly active in the Internet sector. TPG is competing against Silver Lake and other bidders for a minority stake in Yahoo, according to people familiar with the matter.
TPG will independently own the rest of MarketTools, which includes Research Solutions, a market research service, and CustomerSat, a high-end enterprise platform for surveys. It says it plans to expand these services.