Lousy Hotels Inspire Married Consultants to $590 Million Fortune

(Bloomberg) -- Amy Pressman and Borge Hald’s billion-dollar business idea sprung from lousy hotel stays.

While living the grueling road warrior lifestyle of a management consultant, Pressman was often frustrated by the dearth of non-smoking rooms at the hotel where she spent most nights of the week. Despite her loyalty card and frequent complaints, she was ignored.

Helping companies address customer grievances is the goal of Medallia Inc., the software-as-service business Pressman founded with her husband -- and fellow former consultant -- Hald in 2000.

The company, which makes cloud-based software that captures and analyzes customer experience data and transmits it instantly to employees, soared 76% above its already-boosted offering price in its market debut on Friday, before dipping 2.8% on Monday.

That gives its two founders a combined fortune of $590 million, according to the Bloomberg Billionaires Index.

Pressman, 55, and Hald, 52, join a wave of technology entrepreneurs getting rich through cloud-focused firms as companies increasingly tether more of their business to online networks. Medallia’s first day of trading was the eighth-best of 105 U.S. IPOs this year, according to data compiled by Bloomberg. Beyond Meat Inc. was this year’s top U.S. trading debut after its $276 million IPO in May.

Target Price

Stifel Financial Corp. has a target of $43 a share for Medallia, more than 30% above its closing price Friday. Such as surge would put the pair’s stake at more than $700 million. They sold shares worth about $17 million in the July 18 IPO.

Pressman and Hald met while attending business school at Stanford University and later worked as consultants in Hald’s native Norway. They moved to the San Francisco area in 1999 to found Medallia and bootstrapped for years before receiving a first round of venture funding from Sequoia Capital in 2011. Hald stepped down as Medallia’s chief executive officer and Pressman as the company’s president last year. Both remain board members.

Chief Executive Officer Leslie Stretch has also seen his fortune soar since the listing -- at least on paper. When he was hired last year, Medallia’s board granted him 12 million stock options and 2.9 million restricted shares that vest over five years. The awards were worth a combined $459 million at the close on Monday in New York.

--With assistance from Michael Hytha and Anders Melin.

To contact the reporters on this story: Devon Pendleton in New York at dpendleton@bloomberg.net;Ben Stupples in London at bstupples@bloomberg.net

To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Steven Crabill

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