magnifying glass hovers over the words "thomabravo" on a computer screen.

Thoma Bravo Acquires Medallia for $6.4 Billion

3 minute read
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Thoma Bravo has acquired one of the customer experience management software's biggest companies, Medallia, for an estimated $6.4 billion.

Thoma Bravo, a software investment firm, announced Monday it had acquired customer and employee experience management provider Medallia for $6.4 billion. Medallia, which went public in 2019, will now revert back to a private company in the deal.

Medallia has been growing steadily and IPO'ed itself in the summer of 2019. The total revenue for fiscal year 2021 was $477.2 million for Medallia, an increase of 19% from the prior year. When it did the same in 2019, the yearly revenue was $313.6 million.

What does it all mean? More confidence in the software that allows businesses to collect customer data, measure customer sentiment and suggest and create actionable outcomes for communicating and cultivating lifetime customer relationships. A June report by Allied Market Research found the global customer experience management software market anticipated to reach $23.83 billion by 2027, growing at a CAGR of 15.6% from 2020 to 2027.

Medallia will benefit from the operating capabilities, capital support and sector expertise of Thoma Bravo, according to company officials. Thoma Bravo has a deep portfolio of technology and software firms. “Today’s announcement underscores our commitment to constant innovation, expansion and value creation,” said Leslie Stretch, president and CEO of Medallia. “Since becoming a public company in 2019, we have made significant progress bolstering our leadership position in experience management. Today, Medallia benefits from a differentiated portfolio of cloud technology solutions and an expansive, loyal customer base across a diverse set of industry verticals and geographies."

Learning Opportunities

Scott Crabill, a managing partner at Thoma Bravo, said Medallia's SaaS platform leverages proprietary AI to help companies "better understand their customers and employees and drive meaningful business growth at scale." Further, its ability to provide personalized and predictive insights "has become mission-critical in a rapidly expanding universe of structured and unstructured data, where more and more business is transacted digitally."

Under the acquisition agreement, Medallia through September 4th can consider alternative acquisition proposals from third parties. If it sticks with Thoma Bravo, the transaction is expected to close in 2021, subject to customary closing conditions. Medallia will remain headquartered in San Francisco.

Acquisitions Abound for the CX Market

This represents yet another investment and acquisition nod for the customer experience management market, which has been on fire lately. Sprinklr last month offered its initial public offering and is now valued at around $4.74 billion. Qualtrics at the end of 2020 announced its intentions for an IPO and is now valued at more than $20 billion. 

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