SurveyMonkey, a company that offers an online survey service, announced today that it has raised $100 million in senior debt financing led by Bank of America Merrill Lynch and SunTrust Robinson Humphrey.
SurveyMonkey gives websites and other companies a cheap way to create and distribute surveys online. There’s a free option for casual users — say a student looking to create a survey for a class — that has a cap on the number of people that can respond. The premium monthly subscription lets users brand their own surveys and lifts the cap on the number of respondents.
The Palo Alto, Calif.-based company’s main business is monthly subscription plans that allow for more responses and a deeper analytics suite for each survey. SurveyMonkey handles more than 25 million surveys each month, according to the company. It expanded from web surveys to phone polling in June this year after it acquired Precision Polling, and its customers include all of the largest companies in the world on the Fortune 100 list.
The company will use the new funding to expand its business, including some M&A activity, and other corporate purposes like purchasing servers. This is a peculiar step for a web startup, since the lion’s share of startups typically stick to equity financing. That means they raise capital from firms by selling off certain portions of their company in the form of stock.
Debt financing, on the other hand, is a guarantee to pay back the debt with a certain interest rate. It’s equivalent to the sale of government bonds and treasuries that have a fixed interest rate. Secured debt like bonds are typically a safer investment than equity because there is a guarantee to be paid back in the event a company goes under.
These are some pretty heavy-hitting banks — so that could be a testament to the company’s performance. JP Morgan Chase Bank, Webster Bank and Royal Bank of Canada also participated in the round.
SurveyMonkey was founded in 1999.