SurveyMonkey joins the $1 billion club

December 14, 2011, 7:29 PM UTC

FORTUNE — You know what’s cooler than 12 million dollars? One billion dollars.

Okay, that wasn’t quite as snappy as Sean Parker’s exchange with Mark Zuckerberg in the The Social Network. But consider this: Dave Goldberg’s “cool” music startup, Launch Media, was sold to Yahoo (YHOO) for $12 million back in 2001. Fast forward a decade, and Goldberg’s new company, the decidedly prosaic SurveyMonkey (profiled here) is now valued at slightly more than $1 billion.

In a complex transaction announced on Wednesday, SurveyMonkey acquired many of the assets of MarketTools, including Zoomerang, SurveyMonkey’s largest competitor. As part of the deal, TPG Capital is acquiring MarketTools and will transfer Zoomerang, ZoomPanel, a targeting service forsurveys, and TrueSample, a service used by market researchers, to SurveyMonkey. TPG Capital will retain other MarketTools assets and take an undisclosed equity stake in SurveyMonkey.”These are three great products that we’re excited to bring you as we integrate these tools and technologies into our core services,” Goldberg, who is SurveyMonkey’s chief executive, wrote in a blog post.

The deal values SurveyMonkey at slightly more than $1 billion, according to a person with knowledge of transaction, who declined to be named because the terms of the deal were supposed to remain confidential. (The New York Times reported earlier that the deal valued SurveyMonkey at “approximately” $1 billion.)

With the deal, SurveyMonkey joins a growing — but still exclusive club — of small, privately-held Silicon Valley startups worth more than $1 billion that includes Airbnb, Dropbox and Square. (Twitter and Facebook are both much larger and enjoy multi-billion-dollar valuations.)

The acquisition is the biggest in SurveyMonkey’s history, and represents a validation of the company’s “freemium” model, in which basic online surveys are free, but millions of customers pay for premium services that include customer support and the ability to brand surveys. Interestingly, that model was devised by Ryan Finley, SurveyMonkey’s founder, back in 1999, when he started the company in his Madison, Wisconsin, apartment, and long before “freemium” became a buzzword on the Web.

SurveyMonkey’s valuation also cements Goldberg’s considerable net worth — not that he needs the money. Goldberg is married to Sheryl Sandberg, a former senior executive at Google (GOOG), who is now COO of Facebook and is believed to own a substantial stake the social networking giant.