Last year was a tough one for Zendesk, with several months of uncertainty. But the company appears to have emerged from that instability, none the worse for wear, with a new private equity owner and a fresh CEO to lead it into its next phase.
The customer service software company began life in 2007, raising over $85 million along the way, per Crunchbase. It went public seven years later and grew to over $1 billion in revenue. It was fairly smooth sailing until last year.
The landslide of troubling news began innocently enough in February 2022 when Zendesk rejected a $17 billion takeover bid. It believed that the offer was too light, and in a TechCrunch+ analysis, we agreed that it was the right move. It appeared to be worth so much more.
Later that month, Zendesk’s own investors rejected a $4.1 billion offer to buy SurveyMonkey, one that it purported would not only generate more revenue, but also help it move into the adjacent field of customer experience. Investors were not swayed.
After two failed deals in less than a month, it didn’t take long for activist investor Jana Partners to start sniffing around, and they were not happy, not one little bit. By June, investors were hammering the stock, vexed with the direction of the company. While it defiantly vowed to stay private, by the end of the month, it had agreed to be sold to an investor group led by Permira and Hellman & Friedman for $10.2 billion, considerably less, you will note, than the deal it rejected the previous February.
Longtime CEO and co-founder Mikkel Svane stepped down in November, and customer service software industry veteran Tom Eggemeier was brought in to replace him, first as interim chief executive and eventually permanently.
After all that turbulence, it would be easy to think that overall financial performance had suffered as a result, but as you shall see, that really wasn’t the case. We sat down with Eggemeier to find out how he steadied the ship and put the company back on track.
Stand and deliver
Let’s start by examining Zendesk’s market share numbers. According to Gartner, the company is firmly in fourth place in the customer service market, the same place it found itself the prior year. So even after all that drama, its market position didn’t change, showing that even in a time of economic and company instability, Zendesk was able to maintain its position and, more importantly, its customers.