US-based enterprise software provider Salesforce had another interesting year on the corporate venturing side, allocating $250m in capital to four new funds and seeing three of its unicorn portfolio companies going public.
Salesforce is the most prominent corporate venturer in the enterprise space, particularly since Germany-based SAP spun out its CVC arm into the independent firm now known as Sapphire Ventures, and despite the entry of companies like Slack and Workday into the space, it continues to outspend rivals through what remains a primarily strategic approach.
The company’s corporate venturing unit, Salesforce Ventures, has traditionally been eager to put money into specialist funds and was especially active in 2017. The largest initiative was the $100m Platform Fund the unit launched in May, with the aim of boosting its parent’s ecosystem by backing companies developing products on the Salesforce platform.
Platform Fund was followed by three $50m funds later in the year, beginning the same month with the SI Trailblazer Fund, formed in order to invest in cloud consulting companies looking to expand their Salesforce services.
The corporate then launched the AI Innovation Fund in late September to support developers of Salesforce-compatible artificial intelligence software, and an impact investment unit called Salesforce Impact Fund a few weeks later that will provide capital to startups utilising its software for projects covering equality, sustainability, workforce development or the social sector.
Salesforce Ventures does not invest at as late a stage as some of the larger corporate venturing units, but it does participate in growth rounds, the largest of which was an $89m round for I.am+, the AI voice assistant developer formed by performer Will.I.Am, taking its total funding to $117m.
Other notable investments made by the unit include a $60m series F round for business planning platform Anaplan earlier this month that valued it at $1.4bn, a $55m series E round for cloud sales software provider Apttus that increased its overall funding to almost $330m, and a $52m series D round for customer data analytics software producer Gainsight.
Salesforce’s investments were made alongside some notable exits, particularly in the IPO space. Integration software provider MuleSoft raised $221m when it floated in March, before data analytics software producer Alteryx went public in a $126m offering a few days later, and database platform creator MongoDB secured $192m from its October IPO.
A significant and perhaps telling indication of the strength of Salesforce Ventures’ investments is that not only did all three float above their ranges, their shares have all gone up in price since. Alteryx’s stock is up 81% from its IPO price to reach a $1.49bn market cap, while MuleSoft’s has risen 73% to take it to a $2.93bn valuation and MongoDB’s is 19% higher, allowing it to reach a $1.43bn cap.
The corporate also secured some M&A exits during the year, even if they weren’t at the same level as the IPOs. McAfee acquired Skyhigh Networks, a cloud technology developer that had raised $105m in funding, in November after app development platform ManyWho and meeting management platform Do had been bought in March, by Dell and Amazon Web Services respectively.
As for 2018, it will be interesting to see whether Salesforce Ventures aims to invest more tightly within specialist funds. Apttus, Dropbox, the file storage platform valued at $10bn in 2014, and e-signature software producer DocuSign, valued at $3bn, are reportedly already preparing IPOs while portfolio companies SurveyMonkey, Domo, InsideSales and Evernote have all achieved unicorn status. The unit could be in line for some big exits once again, showing it can pay to focus if you’re a corporate venturer.