SAP’s announcement that it plans to take Qualtrics International Inc. public follows robust quarter-to-quarter growth for the SaaS subsidiary, which specializes in customer relationship management technology. The IPO, which is expected in January, could fetch SAP from $12 billion to over $14 billion — well above the $8 billion the company doled out to buy Qualtrics in November 2018.

After the IPO, SAP will retain about 80 percent of the outstanding shares.

That all-cash deal in 2018 had preempted plans for a Qualtrics IPO back then. And it was a smart move to wait until now. According to Stockanalysis.com, the IPO market is on fire. As of Dec. 30, there have been more than 480 IPOs in the U.S. stock market so far this year. That’s 105 percent more than the number of IPOs in 2019. Moreover, the IPOs have boded well for investors, with average returns ranging from 40 to 200 percent.

In the fashion apparel, retail and beauty segments, Qualtrics is a familiar name and it’s also well-known to most large businesses: more than 75 percent of Fortune 500 companies use its platform. Qualtrics’ client roster includes GE, Samsung, Microsoft, Mastercard, Chanel, Adidas, P&G, Under Armour, L.L. Bean, Target and CVS Pharmacy, among many others.

And according to client announcements from the company, the Toyota Research Institute and Talbots recently inked deals to use Qualtrics’ platform.

For the consumer goods sector, the COVID-19 pandemic triggered eye-popping online sales growth, which forced companies to accelerate their investments in digitalization. This includes the technology that Qualtrics offers to help brands better engage customers. The cloud-based software can be used for R&D in product development, product concept testing, market segmentation and price optimization. It can also be used for brand tracking and advertising optimization. And there are companies that also use the SaaS solution internally for managing employees and increasing their productivity.

Qualtrics users can also tap the company’s deep library of content on how to use its solutions to increase customer loyalty and retention while building a brand’s market position and delivering products that consumers want.

Qualtrics was founded in 2002, and is based in Provo, Utah. Since its inception, the company has been on an upward trajectory, both in sales and in acquiring new clients. The most robust revenue gains have occurred over the last four years. According to its Securities and Exchange Commission filings, the company’s annual revenue has grown from $191 million in 2016 to about $723 million this year. During that period, the company’s gross profit rates have been ranging between 68 and 72 percent — making it one of the most profitable companies in the industry.

It’s also important to note that the Qualtrics IPO follows another milestone in the CRM space: Salesforce’s acquisition of Slack for $27.7 billion. While the Slack deal is astonishing in its size, it also reflects the same business trends that drove SAP to launch the Qualtrics IPO: Businesses are evolving to be more digital (with more workers working remotely) while consumers are spending more time and money online.