The service has been growing like a weed and currently 25 million people a month respond to those surveys. Most of those don’t pay, but Survey Monkey upsells customers to paid plans with more bells and whistles and which allows for more surveys. Earlier this year, it acquired Precision Polling, a phone survey startup.

SurveyMonkey is a very high margin business, with revenues rumored to be above $50 million a year. Basic surveys are free, but if customers want branded surveys or unlimited questions and responses, they have to pay up to $20 a month. It is a classic freemium business model. And it appears to be doing quite well based on the fact that SurveyMonkey went for debt financing, which is easier to do with strong cash-flow businesses.

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Authors: Erick Schonfeld

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