Shares of the San Francisco company were advancing 13.3% to $32.12 on Friday. Trading was halted in the afternoon due to volatility.
Medallia, which has about 2,000 employees, is working with a financial adviser, Bloomberg reported, citing people familiar with the matter.
Private-equity firms have expressed interest in buying the company, but no final decision has been made and Medallia could opt to remain independent.
Medallia didn't immediately respond to a request for comment.
In other recent acquisition news:
KKR and Clayton Dubilier & Rice LLC said they would pay $16 a share in cash for Palo Alto, Calif. company.