Reflecting on 2021, one thing is clear: enterprises can’t seem to get enough of the cloud.

By Alex Kayyal and the Salesforce Ventures team

Since 2009, our mission at Salesforce Ventures has been to invest in the most innovative cloud companies and founders around the world and support them in their efforts to reimagine the future of enterprise technology. Each year our team meets with thousands of cloud companies and speaks with hundreds of CxOs and experts in our network. And while we always believed in the impact and potential of the cloud, we’ve never seen growth like we’ve seen in the past twelve months.

Cloud companies are handily blowing through previously-set records across every measure — whether it’s product adoption, growth rates, or large customer deployments. While best-in-class companies would previously target 3x year-on-year growth, we’re now seeing outlier companies that are growing revenue 5x-10x per year. And the timeline from inception to $100M ARR has never been so short. Growth-stage companies that would typically model annual growth declines year after year are now seeing acceleration in revenue growth — something we had historically rarely seen in SaaS.

In 2021 we invested in a number of next-gen software companies that have exceeded even our most ambitious expectations, including Aiven, BetterUp, Drata, Miro, Monte Carlo, PopMenu, Vercel, and Wiz.

Even still, the potential ahead of us appears to be far greater. According to Morgan Stanley, only 25% of application workloads are running in the public cloud today, representing a significant growth opportunity. In a recent survey of CIOs, Morgan Stanley noted that in the next three years, that figure could rise to 44%.

The public markets may have pulled back from technology in recent weeks, but based on our internal research, we believe enterprises will continue to be big buyers of software and that the long-term holds great promise for the cloud. We are investing accordingly: this past year we invested ~$1.7B in capital and welcomed Slack Fund. In the same period, 22 of our companies were acquired and eight went public.

As we’ve written previously, the global pandemic necessitated a trend toward remote and hybrid work, which continues to drive demand for cloud technology. However, at the same time, there is also a broader and more permanent sentiment shift toward working in the cloud that is rooted in the belief that the cloud enables more efficient, more resilient, smarter ways to do business.

Salesforce Ventures has obviously been bullish on the cloud for more than a decade, but even we are amazed to discover how many of our companies’ addressable markets have rapidly expanded over the past couple of years and are now far larger than anticipated.

As we look back on the companies we partnered with this year, we’ve realized that the fastest-growing cloud companies have a few things in common:

1. They’re building mission-critical solutions
2. They’re inventing and mastering new growth strategies, including product-led growth and community-building
3. They foster more online collaboration between internal and external teams

Here is a little more context on how some of the fastest-growing cloud companies exemplify these trends.

#1: It’s hard to say no to mission-critical software

As enterprises adopt more and more cloud technology and expand their multi-cloud environments, they’re coming up against new challenges such as data management and security. Companies that help CIOs and data teams manage and extract value from their data or help keep CISOs out of the news have become critical.

• Wiz, an agentless, API-based company that secures cloud infrastructure, saw a massive acceleration in demand as more workloads shifted to the cloud in 2020 and 2021. By providing a singular platform that security teams could use to monitor vulnerabilities across a company’s entire cloud environment, Wiz has become a mission-critical platform for the world’s leading companies.
• As security has become a board-level conversation, companies are demanding that their vendors meet critical requirements, such as achieving SOC2 compliance. This was a key driver behind our investment in Drata, a security and compliance automation platform that makes it easy for companies to automate the process and build trust with their customers.
• Like security, as data has become a key differentiator among companies, data management has turned from a nice-to-have to a must-have. Companies continually generate increasing amounts of data, including user data, log files, and time-series metrics. These data sets often reside in different locations; organizations that are able to analyze these distributed data sets efficiently and at scale have a competitive advantage. This is the mission of Starburst Data, which sells a distributed data analytics engine that makes it easy for users to access and query data wherever it lives.

#2: Product-led growth and passionate communities create incredible flywheels

Hyper-targeted marketing and tailored online customer journeys make it easier than ever to attract individual users, who invite others to join them and create the adoption flywheel known as product-led growth. Buying power has shifted from top-down, CxO-driven decisions to sales processes that are driven by the end-user. As individuals and teams try to solve problems to improve their own workflows, they are increasingly relying on communities to help them find the best solutions.

• Slack was a pioneer in building a bottoms-up go-to-market strategy, and now companies are increasingly leveraging Slack to build their own communities. Airbyte, an open-source data ingestion company, has fostered a robust Slack community with thousands of members who can connect with other users, ask questions about the product, and update users on new features. Airbyte also announced a participative model, where developers who build on Airbyte can earn a share of revenue when their data connectors are used.
• Aiven, a managed open source data technology company, has made giving back to the community part of the company’s mission. In 2021, it launched an official program dedicated to contributing to open source as well as a startup program that offers free credits and access to Aiven’s expertise and support to enable startups to get to market faster.
• Strong communities provide product validation. When talking with customers of Salesforce Ventures portfolio companies such as Astronomer, which is building a data orchestration engine on top of the open-source Airflow project, we noticed buyers look at metrics such as Github stars, forks, and contributors to understand how active and successful a project was.

#3: In a fast-moving, remote-first, global economy, cloud-based collaboration is imperative

When all or most of your work is done in the cloud, collaboration software is the new office. It’s no wonder the collaboration software market, valued at $28 billion, is growing 15% annually. Last year, Keybanc published a survey in which 67% of CIOs said collaboration is their #1 budget priority. Salesforce Ventures has been actively investing in tools that increase productivity for teams, whether they’re in person, remote, or hybrid.

• This past June we invested in monday.com, which provides an asynchronous, no-code software platform to manage workflows and has created a new category of software it calls “Work OS.” The company makes it easy for employees across an organization to create their own workflows without the help of a team of engineers. Getting started in the product is incredibly easy, and their ability to turn the complex into simple has led to a large array of collaboration and workflow use cases that their users absolutely love.
• We also invested in Airtable, a connected apps platform that helps users modernize business processes, and Notion, a platform designed to boost team productivity, with the goal of helping enterprises improve collaboration among the 1.25 billion knowledge workers globally.

Values-driven companies continue to win

Salesforce Ventures invests according to our values, including a focus on social responsibility, sustainability, and diversity. We are proud to partner with companies that lead with their principles. We’ve introduced a DEI clause in all of our deal agreements with founders to ensure alignment upfront. We routinely check a company’s Glassdoor rating before making an investment decision, and we will walk away if we believe the company’s values don’t align with our own.

• We also have 190+ companies in our portfolio that have joined the Pledge 1% movement. Modeled after Salesforce’s 1–1–1 model, this program allows companies to donate 1% of their time, equity, product or profit back into their communities.
• We’re thrilled to continue our support for Black Venture Institute. Since its launch in Fall 2020, BVI has graduated three cohorts — that’s 160 new Black check writers in venture capital! These graduates have made over 300 individual angel investments and evaluated over 1,000 new investments.
• During the pandemic, people all over the world have had to deal with adversity, leading to an unprecedented rise in mental health challenges. This is one reason why we are proud to partner with BetterUp and Lyra, two companies that put values at the core of their business. We also doubled down on our investments in companies such as Unite Us, which is closing gaps in health and social services for historically underserved populations.
• Against the backdrop of unprecedented climate events and Salesforce’s own Net Zero achievement, we accelerated our sustainability investments in carbon offsets, where Sylvera plays a critical role in verifying carbon offset data to ensure that funds flow to the highest-quality projects.

Onward

If we’ve learned anything these past two years, it’s that change is the only constant. Cloud technology helps workers learn, respond and iterate faster, giving their companies a competitive edge. The future for the cloud is wide open and we’re here for it. Come talk to us.

Here’s a closer look at 2021:

A Seemingly Endless Appetite for the Cloud was originally published in Salesforce Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

Salesforce Ventures announces its significant investment in the $400 million Series C round of Miro, the online collaborative whiteboard platform that brings teams together, anytime, anywhere.

By Alex Kayyal, Nowi Kallen, Jessica Bartos, Kartik Gupta, and Samuel Ackah-Yensu

We all know “a picture is worth a thousand words.” Yet most software apps for knowledge workers only provide new ways to write and organize words — and little-to-no ability to collaborate visually.

This problem is particularly acute in the new era of distributed work. In the past, you gathered around a whiteboard in a conference room to brainstorm new ideas with your team. The group’s productivity was limited by the physical size of the whiteboard and whoever was in the room. Post-meeting, if you wanted to share your team’s work, all you could do was take a photo of the whiteboard. The old way of collaboration is static and limited by physical constraints and doesn’t work at all in our digital world.

Enter Miro, a visual collaboration platform for knowledge workers. Miro is a cloud-based digital canvas where you can co-create visually with your colleagues in real-time and asynchronously. Your team can use Miro to exchange ideas, make complex decisions, design products, and processes, host meetings, and gather and organize detailed feedback — all in a fun, accessible, interactive way. We are proud to announce that Salesforce Ventures is making a significant investment in Miro’s $400 million Series C fundraise.

The future of work = Digital HQ

This investment reflects our belief in the rise of the “Digital HQ” as the foundation of the future of work. It demonstrates our conviction that the future of the enterprise is collaborative — as evidenced by our earlier investments in collaboration software companies such as Airtable, Hopin, Monday, and Zoom. The collaboration software market is currently valued at $28 billion and is growing at a 15% CAGR. Last year, Keybanc published a survey in which 67% of CIOs said collaboration is their #1 budget priority.

At Salesforce Ventures, we believe visual collaboration will become one of the most important categories of enterprise software in the coming years as teams continue to look for ways to bring the interactive, visual elements of in-person teamwork into new hybrid environments.”Indicating this trend, Gartner reported a 10x increase in interest in visual collaboration over the past 18 months.

Easy to adopt and easy to scale

Miro has become the visual collaboration category leader thanks to its product-led growth strategy and easy-to-adopt nature. Initially gaining traction among designers, product managers, and engineers, Miro spreads virally in an organization as workers invite colleagues to collaborate. Sales teams host interactive meetings with customers on their Miro boards. Executives ideate on strategy and plan new projects. Learning and development teams create and deliver engaging interactive content.

Miro encourages multi-directional communication and is scalable to thousands of team members working together from anywhere, on any device. And Miro integrates with 100+ other tools, such as Airtable, Confluence, Jira, Monday, Office 365, Slack, Trello, and Zoom.

Since its April 2020 Series B, Miro has grown from five million users to more than 30 million. Its paying customers have increased by more than 550%, and Miro is now used by employees at 99% of Fortune 100 enterprises. Miro’s enterprise business has also shown significant growth and progress — the company now has 20 customers with contracts worth $1+ million in annual recurring revenue. Indeed, this is one of the fastest-growing enterprise software companies we’ve come across.

Customer love and community

What’s Miro’s secret? Customer love and community. The company’s founder and CEO, Andrey Khusid, is a product leader who guides the company toward delighting users through continued product iteration. For example, in recent months, Andrey and his team have added deeper functionality to facilitate new ways to run meetings in Miro with Smart Meetings, which includes chat, reactions (love those!), voting, and increased controls — all of which contribute to a more dynamic, inclusive, and interactive experience.

Miro is the highest-rated visual collaboration tool on G2 and its Net Promoter Score rivals much-loved consumer brands. The company created and fosters a community of its most passionate users. Dubbed “The Miroverse,” it gives users a sense of ownership of the product and has become an integral part of Miro’s organic growth. In the Miroverse, members advise and inspire each other, while also sharing templates (more than 1,000 so far) to help others quickly get up to speed and make new boards of their own.

Dual-headquartered in Amsterdam and San Francisco, Miro has assembled a global organization of more than 1,200 employees — a 5x increase in the last 24 months. Andrey and the “Mironeers” have built a world-class culture. The company earns high Glassdoor ratings: 92% of employees would recommend Miro to their friends.

We’re excited by the scale of the problem Miro solves, its product innovation, stellar hypergrowth execution, and amazing team. Miro’s story shows that great businesses can be built anywhere — unconstrained by borders or distance. We view Miro as a generational company that will disrupt collaboration in the enterprise for years to come.

Congratulations, Miro, and welcome to the Salesforce Ventures family!

Welcome to the Miroverse: Unlocking Expression in the Enterprise was originally published in Salesforce Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

In a time of historic change, technology is giving people the power to rewrite the old rules of business. Welcome to the 2021 Cloud 100.

When everything changed in early 2020, as a society we had no choice but to re-think the way we work, live, and do business. This introduced a new paradigm where we could reimagine our future. And as the internet became the most reliable window to the world, the cloud became an even more critical pathway to creation, connection, and commerce.

At the start of the pandemic, many leaders feared shutdowns would lead to a significant backslide in spending. While some industries have struggled to rebound, cloud technology has helped many others to recover. Technology offered a way up and out of the recession for visionary business leaders as enterprises accelerated their digital transformation plans and small businesses moved processes online.

We believe this is just the beginning. We’re about to enter a new period of business creation we’re calling The Great Reimagining.

Over the past 18 months, the total market cap of publicly traded cloud companies has soared from $1 trillion to $2.3 trillion, representing the fastest growth in the history of the cloud. Private cloud company valuations have been on a similar trajectory: every company on the 2021 Cloud 100 list carries a valuation of at least $1 billion, with an average valuation of $5.2 billion. This represents 420% growth from 2016. The total value of the 2021 list is a staggering $518 billion — nearly double last year’s level.

In partnership with Forbes and Bessemer Venture Partners, we’re thrilled to celebrate the accomplishments of the companies on the 2021 Cloud 100. Salesforce Ventures is proud to have invested in 27 companies on this year’s list, including three of the top ten: Stripe, Databricks, and Plaid. We also celebrate Slack Fund companies Loom and Notion, bringing our combined total to 29 companies on this year’s list. Congratulations to all of this year’s honorees!

Business leaders around the world are questioning everything they thought they knew and using this new understanding to reshape their strategies for success going forward. Customers’ needs and habits are evolving. Employees’ roles, attitudes, and workplaces are shifting. So are cities, suburbs, and real estate. Manufacturing, logistics, and shipping. School, childcare, and parenting. Transportation and travel. Entertainment, restaurants, and events. Financial services and banking. It’s hard to think of a single industry or activity that isn’t undergoing a major transformation.

As the world changes around us, technology is making it possible for us to respond quickly and change along with it — an urgent need for those who want to come out of this period victorious. As we examine this year’s Cloud 100 we see that the companies who made the list succeeded by helping organizations become more agile and resilient and in some cases, by rewriting the old rules of business.

Here is our take on the key themes driving this year’s Cloud 100:

New Paradigm #1

As the cloud becomes global, Silicon Valley is becoming a construct

Not too long ago, venture capitalists on Sand Hill Road mused that they would not invest in any startup that was more than an hour’s drive away. But more and more technology companies are finding success in every corner of the globe.

After spending the last decade investing in tech companies across over 20 countries, I’ve witnessed this global acceleration firsthand. The data backs up this trend: venture funding to startups in Europe reached an unprecedented $59 billion and the share of VC funding dollars outside the US reached 52% in the first half of 2021. This year’s Cloud 100 included 38 honorees founded or based outside of the US, making this year’s list the most global group to date. Among them are BigID (Israel), Canva (Australia), Cloudinary (Israel), CultureAmp (Australia), Miro (Netherlands), OwnBackup (Israel), and Talkdesk (Portugal). For the first time ever, two Chinese companies also made the list: Fanruan and Jushuitan.

Why now? Unlike localized consumer businesses such as, say, food delivery, the cloud knows no borders. It’s just as easy to deliver cloud solutions to a customer next door as it is to deliver to a customer a continent away. Enterprises around the world have relatively similar needs and problems, and entrepreneurs from Australia to the UK have discovered that the usefulness of their products easily translates.

Moreover, companies have found large, diverse talent pools of engineers across multiple regions in the world, often starting with where the startup was founded. This has led to development hubs, as well as distributed teams that are remote. Virtual event startup Hopin, for example, was founded just two years ago in the UK; the company now has 800 employees around the globe that are remote-first. Importantly, companies outside Silicon Valley have seen stronger retention rates for top technical talent.

As many of these early cloud companies outside the Valley proved success, including Datadog ($40 billion market cap), UiPath ($32 billion market cap), monday.com ($10 billion market cap), and Anaplan ($8 billion market cap), entrepreneurs and investors took note. Founders saw validation that building an enduring cloud company outside Silicon Valley was indeed achievable. And as the ambition levels of those entrepreneurs spiked, investors paid attention.

The pandemic further accelerated this trend with VCs investing in founders they’ve never met in person, reducing the barriers of physical proximity even more. The playing field has been leveled. Now, we see a flywheel in motion as the ecosystem, talent, and funding are in place across an increasing number of geographies across the world.

New Paradigm #2

Product and developer communities rule the day

In the old rules of software, you would hire a large enterprise sales team that would sell your product to customers top-down. But modern software companies know that bottoms-up growth is a powerful way to scale, and that community is not just an afterthought — it’s a strategic advantage, both for developers and customers. We’ve seen IT budgets now extend far beyond CIOs to also include lines of business and developers.

Two critical interrelated trends have emerged: the importance of cultivating a community around your company and product; and product-led growth.

Cloud 100 companies such as Automattic, Databricks, DataRobot, Hashicorp, Postman, and Snyk have demonstrated the power of nurturing and investing in their communities as a means of driving greater adoption. With the rise of open-source software in parallel, companies are looking to ship product with greater agility and speed than ever. These developer communities have become the foundation of category-defining companies.

We’ve also seen just how quickly growth can happen when companies adopt a product-led growth model, as evidenced by companies such as Contentful, Canva, Figma, Gong, Highspot, Hopin, Pendo, and Zapier. The North Star for these businesses is not just about landing a new customer; it’s about optimizing the user experience, making it simple to deploy their software and actively engaging their passionate user base.

When we first started the Cloud 100 six years ago, there were only a handful of companies that adopted community and product-led growth as strategic vectors for growth. We now see how critically important this has become and expect to see an even greater number of cloud companies that will adopt this framework going forward.

New Paradigm #3

Every software company can be a fintech company

Just a short while ago payments were dominated by a few behemoth players who seemed to be invincible. Banking regulations and incredibly steep barriers to entry made it nearly impossible to compete with financial institutions that controlled trillions of dollars. But a new API-led infrastructure has enabled entrants to invent novel business models.

The valuation of fintech companies on the Cloud 100 rose 461% since 2019, reaching $146 billion this year — more than a quarter of the value of the entire list. Part of that increase can be attributed to the pandemic: as shoppers moved online, e-commerce penetration in one quarter grew to 33%, representing the equivalent growth of the previous ten years combined.

Three of this year’s top ten Cloud 100 companies are pure fintech plays: Stripe, Plaid, and Checkout.com. Newer entrants, such as Airwallex, Flutterwave, and Razorpay are taking digital payments to the rest of the world, while companies such as Forter keep e-commerce payment transactions secure.

In addition to dedicated digital payment platforms, vertical SaaS companies are embedding fintech options into their products. Now customers of vertical solutions such as Procore, ServiceTitan, and Toast, can seamlessly process payments and payroll in their existing workflows. Restaurateurs, for example, can use Toast’s point of sale software to manage restaurant operations while also managing payroll for their cooks and waitstaff. These lines will continue to blur, and we expect to see more financial innovation in the cloud software ecosystem.

The new rules of software and business are still being written. We expect that next year’s Cloud 100 will teach us even more about the way the world will work in the future. Meanwhile, please join us in congratulating the current batch of billion-dollar cloud companies!

For more data, insights, and videos from this year’s Cloud 100, visit: https://bit.ly/2021cloud100

The Great Reimagining: Welcome to the 2021 Cloud 100 was originally published in Salesforce Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

As part of its strategy to support companies reinventing the future of work and help them scale, Salesforce Ventures has made a $75 million private placement investment concurrent with monday.com’s IPO.

By: Alex Kayyal, Nowi Kallen and Alexandra Quie

The challenges and constraints of the past year have redefined work, accelerated digital transformation, and led to an urgent call to action for new technology solutions. As workers increasingly worked from home, teams had to find new ways to communicate and stay productive — all while adjusting to constant and unpredictable change.

Technology tools such as Zoom and Slack became mission-critical because they enabled synchronous communication at a distance. monday.com hit their stride offering an asynchronous software platform to manage workflows using no code. monday.com has called their platform, and this new category of software, a “Work OS.”

More broadly, workflow automation is key. In its recent “Trends in Workflow Automation” report, Salesforce found that 95% of IT and engineering leaders are prioritizing workflow automation. A Keybanc study found that 67% of CIOs say collaboration is their #1 budget priority.

We couldn’t agree more, which is why Salesforce Ventures has made a $75 million private placement investment in monday.com, concurrent with its IPO. This is a continuation of our strategy of investing in collaboration tools that enable any organization or team whether at the office, remote or hybrid to be highly productive, and in low code/no code software programs that democratize access to technology.

Born for this moment

monday.com co-founder and co-CEO Roy Mann was a senior executive at Wix as he built a tool to help people in different departments manage their projects. He, together with his co-founder Eran Zinman, launched monday in 2014 with the core mission: “To give our customers the power to create their own work software…and give them the same abilities once reserved for software creators and designers.”

monday.com was doing well before the pandemic, but with shutdowns and remote work, its tools have become even more critical. The company’s growth is both a signal and a remedy: it shows us that the concept of “the workplace” has been irrevocably altered, from a physical office to a cloud-based, unified workspace, and it offers us a way to embrace that change.

Unleashing innovation

No code/low code software products like monday.com make it possible for non-technical workers to create their own custom building blocks to manage their workflow without the need for a developer. Given the shortage of programmers who can build software from scratch, as well as the time and cost of such endeavors, companies of all sizes are drawn to the productivity boost and potential of no code/low code software.

This new generation of tools offers a vision for an optimistic future in which everyone has access to simple tools that enable them to create whatever they need to work better. Democratizing technology in this way can lead to an acceleration of innovation and the introduction of amazing new technologies we would never have seen otherwise.

Our investment in monday.com is Salesforce Ventures’ latest foray into the no code/low code movement. Among our investments: AirKit, a low-code platform for hyper-personalized, end-to-end customer journeys; Genesis, a low-code software platform purpose-built for financial markets; Gong enables sales reps to reduce manual entry and automate sales processes through software; Process Street: enabling teams to build operating procedures, checklists and workflows; and low-code sales commission software Spiff, with intuitive UI and real-time visibility into commissions calculations.

Software everyone wants

The key to making productivity software for this new era is to make sure it is so simple and intuitive that new users don’t need training. The C-Suite is not always the primary decision maker anymore, buying a suite of products and requiring employees to use it. Individual employees are discovering software and trying it out for themselves. monday.com’s user experience and design are so smooth people actually want to use it — and since it’s a collaboration tool when one person tries it, they invite two teammates, who invite two teammates, and… you get the idea.

Such is the promise and challenge of product-led growth. Adoption is a flywheel, starting with smoothly onboarding the first user or team at an organization. With hyper-targeted marketing, reaching that first team member is easier than ever. The customer journey is tailored to each individual, starting from their search on Google. monday’s platform enables them to derive value by offering customized and department-specific landing pages, templates, pre-built integrations, and more. With this viral growth, monday.com is now seeing increasing interest at the enterprise level to implement the solution across an organization, organically working its way up to the C-suite.

One of the unique selling propositions of monday.com is its flexibility. Customers use the platform for a wide range of use cases from marketing and operations to project management. The term “Work OS” makes a lot of sense. monday.com supports more than 100 integrations with other software products, including email, Slack and Salesforce, so users start and complete integrated workflows on their platform providing a single source of truth.

Congratulations, monday.com, on your IPO and welcome to the Salesforce Ventures portfolio!

Footnote: monday.com information is based on company and public information.

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Monday is our Favorite Day was originally published in Salesforce Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

By Alex Kayyal and Nowi Kallen

Earlier today, Hopin announced its $400M Series C at a $5.65BN valuation, just over a year after closing its Series A, bringing its total funding to over $550M. This is a remarkable achievement for such a young company and a testament to the team’s relentless execution over the last two years. In just a short amount of time, Hopin has added 80,000 organizations to the platform while scaling from 6 to 400 employees. The company has grown its ARR to north of $70M from launch in March 2020, making them one of the fastest-growing software companies ever — incredible!

When Johnny Boufarhat started Hopin, he dreamed of a future where location simply did not matter and attendees could experience engaging online events from anywhere and everywhere. He wanted to upend an old way of doing things and reimagined the future. Visionary founders can often see ahead of the bend, and in Johnny’s case, he started Hopin before anyone even knew what COVID-19 was.

When we invested in their Series A last summer, Johnny’s sense of clarity and purpose shone through. As a VC, those are rare moments where vision and opportunity collide. Since our investment, we have been continuously blown away by Johnny’s rare combination of tenacity, humility, and grit. He has also assembled a world-class team around him, as they continue to build on the company’s vision. We’ve also been thrilled to help bring Salesforce as a Hopin customer across numerous parts of our business and to also facilitate a product partnership conversation across the two platforms.

Importantly, despite all the success Hopin has had so far, the business is only just getting started. Johnny’s vision is to reinvent not only events, but online experiences more broadly, and we’re so excited for what the future holds for the company and our continued partnership together.

Taking a step back, this represents yet another inflection point for European tech. I can still remember a time when starting a company in Europe was seen as a disadvantage. It was unthinkable back then that one of the world’s fastest-growing software companies ever would come from Europe. Not anymore.

We’ve come a long way since then. Companies like Anaplan, Elastic, and Adyen have shown the extent of what is possible, and in many ways, Hopin is a preview of the sorts of success we can expect to see out of Europe in the coming years. With access to funding, global talent, and a thriving ecosystem, it’s one of the most exciting times to build an enduring software business out of Europe. We’re no longer only tracking how many $1BN+ companies there are in Europe, but rather how many $10BN+ and $50BN+ companies we have.

What’s more, last year really leveled the playing field for entrepreneurs outside Silicon Valley, despite the challenges that COVID-19 presented. In Hopin’s case, what started as a UK business has now flourished as a global company with incredible talent across 42 countries.

At Salesforce Ventures, we’ve long believed that great companies can come from anywhere. We look forward to continuing to back these amazing entrepreneurs across all of Europe and beyond.

Hopin and the coming of age of European tech was originally published in Salesforce Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

Transforming Tomorrow is a series where we share lessons learned from the leaders of the enterprise technology companies shaping the future. Co-founder and President of Snyk, Guy Podjarny, shares lessons on his journey as a second-time founder, most recently at Snyk, a $2.6BN security company.

As an entrepreneur does it get easier the second time around? How should you handle skepticism from VCs? And how do you decide to hand over the reigns as CEO of the company you started?

Guy Podjarny has faced all these questions. He is co-founder and President of Snyk, a company built on the idea of embedding security in the code development process. After raising $7 million in a March 2018 Series A, the company is now worth $2.6BN following its recent Series D — and has raised more than $450M in funding. We’re delighted to have backed the company in their Series B at the end of 2018 and to be part of their incredible journey. Along the way, Guy has made decisions that were bold and oftentimes non-obvious.

I wanted to know more about his path, so I spent some time with him to talk about what led him to create Snyk — and what has made the company so successful.

Ignoring (and Winning Over) Skeptical VCs

Most great companies are founded on the back of some key insight or big idea. It’s usually something powerful but yet simple enough that anyone can understand it.

In the case of Snyk, this insight came with deep domain expertise. Guy had spent over 10 years working on application security (with stints at Sanctum, Watchfire and IBM Rational Security). He then moved to the world of web performance and became part of the DevOps revolution that was taking hold. It was the culmination of those two experiences that led to his “aha” moment. Guy questioned and challenged the paradigm that existed in the security industry, and it was this new framing that made Snyk so appealing to us when we first met the team.

“I realized that the way to get developers to embrace security is to build a developer-tool company, not a security company,” he says, “a company that puts the developers’ needs and the developers’ experience at the center.”

Despite their success today, Guy and his co-founders Danny Grander and Assaf Hefetz heard mixed reactions when pitching their idea initially. The feedback from VCs was that developers won’t care about security and that there’s no money to be made in developer tooling. But Guy persevered with a level of conviction that we see from the very best founders.

“I felt like the destination was an inevitability,” he says. “So fundamentally, we have to be secure, and we will continue building faster and faster software. Maybe I succeed and maybe I fail, but this will happen. Either I do it or somebody else does, but it will happen.”

For Guy it was a question of when, not if. As an investor, I love these moments when an entrepreneur you meet has such a high sense of purpose and clarity that you can’t help but imagine the future with them as they disrupt an industry.

Lessons from the Second Time Around

There’s no single mould for being a successful entrepreneur. Being a repeat founder can help however (though it doesn’t always). Guy’s first startup (Blaze Software) was a front-end web optimization company that was acquired by Akimai where he subsequently became CTO.

“I was keen to do something that matters, and to try and go big with the second one,” he says. “The more I was told it can’t be done, the more convinced I was that it needs to be.”

The second time around, entrepreneurs get a bigger leap of faith from those around them. Guy has also been able to leverage his network of investors and early hires when building Snyk. Most importantly, he admits that being a repeat founder gives you more confidence in your own skills.

“As a fellow entrepreneur told me, when you found your second startup, you’re still meant to cross an ocean, but now you know how to swim”

How can you learn how to swim if you’re a first-time founder? There’s no real substitute for the real thing, but you can at least shortcut key lessons by surrounding yourself with people you can learn from at every turn and who can help you grow. And whether it’s your first company or your fifth, remember that this becomes your life’s work so do something you’re insanely passionate about. Otherwise, what’s the point?

Being a Product Led Company

One of the hardest decisions any company makes is when to aggressively invest in sales & marketing. There’s certainly no one-size-fits-all approach here, but Snyk’s growth path does shed light on some important lessons.

First, by focusing on the developer experience first and foremost, Snyk found its true calling before the windfall of revenue that propelled its hyper-growth. Guy feels putting off monetization was critical to getting the bottoms-up motion established, and even then did so alongside expanding the community-led reach to two or three additional developer ecosystems.

So it’s absolutely fine not to focus on revenue in the beginning. For Snyk, building product depth at the expense of breadth was a huge long-term advantage. Today they have over 1.5M developers in their community because of that user experience.

With buying patterns in technology also changing, it’s important to keep in mind that the buyer and user of your product might not always be the same. Guy realized early on that he had to offer different value propositions to each persona, and this was key to the go-to-market success of the company.

This took some time to get right. Guy acknowledges that he wasn’t aware in the early days that sales and marketing are a product in their own right, and that they also require significant investment.

“You can’t just hire marketing and sales leaders and then have good marketing and sales off the bat,” he says. “It’s a product that requires iteration, so you need to hire it not too soon but sufficiently soon, sufficiently early.”

Knowing When to Bring in a CEO

One of the hardest decisions any founder makes is whether to bring on another CEO. It’s an intensely personal decision, but as Guy showed, you’re better off making it when things are going well.

Guy had grown from 23 people to 84 people in one year, and was on track to reach 250 employees by the end of the following year. Being self-aware paid off handsomely though.

“My energy as CEO was almost entirely focused internally, and I perceive myself as a product guy,” he says. “I think I have a pretty good ability to understand where the community is headed, where the market is headed, and help mobilize the troops. The company needed this forward-looking focus, and I was the right person to provide it, but as CEO I didn’t have that time.”

In other words, Guy had no time to do what he loved the most. He was doing that as part of his “3% time” at the edges instead of making it his core focus. At that point, he realized he wanted to bring someone in who could help operate the company at scale.

“I did some introspection as part of that, and I realized that being a CEO is not my journey. It’s not what I want, not how I identify. If anything, I’m probably closer to a CTO. So it was actually not as hard for me to give up that title as it might have been for others.”

He and Peter McKay, Snyk’s current CEO, also have a history of working together in multiple capacities over the last 15 years. They had both worked at Watchfire previously (where Peter was CEO), and Peter was also an investor and Board Member in Snyk. So when the opportunity to bring Peter on board as CEO presented itself, Guy jumped on it.

“Just because the situation is good doesn’t mean it can’t be better, so you don’t need to wait until you’re failing as a CEO to choose to change gears,” he says. “You need to think about what can be better, and in my case, being CEO wasn’t the best thing for the company. What’s good for the company is good for me.”

Indeed, the combination of Guy and Peter has been incredibly powerful as they compliment each other so well. Importantly, they share the same values which has been so fundamental to building the culture at Snyk. As investors, we believe that great teams build great companies.

Guy continues to spend a big part of his time on hiring, as well as broader strategy and execution. In his view “helping us add the right people to the company, or preventing the wrong people from joining the company, is one of the most valuable things that I can do.”

Despite Guy’s prior success, he remains incredibly humble and ambitious today. Maybe most importantly, he’s exceptionally self-aware as an individual, which has allowed him to continuously re-invent himself on the path to making Snyk an enduring company.

For me, one of the key lessons is that when you’re introducing something truly unique and disruptive as part of a new paradigm, it doesn’t seem obvious at the outset. For Snyk, what has sustained this path is deep conviction along with obsessive focus on customers and product, while at the same time continuously ensuring that the team is the very best it can be across every single function. We’re so grateful to be part of this journey and can’t wait to see what the future holds for Snyk and their customers.

Visit our website at www.salesforce.com/ventures for more and follow @SalesforceVC on Twitter and LinkedIn. For further insights on the enterprise SaaS landscape and additional founder spotlights, follow me on Twitter at @alexkayyal.

Transforming Tomorrow: Guy Podjarny, Founder of Snyk on how “the destination was an inevitability” was originally published in Salesforce Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

We are all facing the same existential threat right now — and it’s profoundly more challenging than anything else most of us have experienced. At Salesforce, our priority has been on making sure our employees, families, and communities are safe and healthy. We’ve also maintained our focus on customer success and Salesforce has shared a number of valuable resources to help our customers navigate this unchartered territory.

At Salesforce Ventures, we are acutely aware that founders and teams across the globe are struggling with how to make difficult and sometimes painful decisions — what course of action to take, how to rewrite 2020+ budgets, and what assumptions to make around customer adoption, revenue growth, sales efficiency and cash burn. Of course startup CEOs are always operating in uncertain conditions, but the current situation calls for an entirely new level of thoughtfulness, analysis, and grit.

This pandemic is obviously different than any other downturn and so much is still unknown, but I thought it might be helpful to take a look at some data around the last big financial crisis of 2008/2009 to see if there are any valuable lessons we might be able to draw on.

For context, during the 2008 downturn, the Nasdaq index fell by nearly 50%. It took about 170 days for the market to hit bottom. So far in 2020, the Nasdaq has fallen about 30% in less than 30 days due to COVID-19, making this one of the fastest and steepest declines in history.

Here are three metrics and how public SaaS companies were impacted in 2008:

Revenue Growth

For this analysis, we’ve looked at three periods, each comprised of three quarters: pre-crash, mid-crash and post-crash¹.

Across the board, and regardless of revenue size, most companies experienced significant reductions in growth rates during the 2008 crisis. Athenahealth was a notable exception which saw modest growth acceleration, as some SaaS businesses were more defensible.

The median quarterly growth rate (YoY) prior to the crash was 44% growth. This fell to 11% in the 3 quarters after the trough of the crisis, representing a reduction in growth rate of 74%. Importantly, this was true regardless of ARR/revenue level. On a more positive note, SaaS companies did continue to grow (despite the lower rate), which is certainly not true of other industries during this period.

Sales Efficiency

It is pretty intuitive that sales efficiency will get worse in this period. But by how much? We’ve defined sales efficiency as the ratio between gross margin adjusted incremental quarterly revenue and S&M spend in the prior quarter.

A similar picture emerges, where sales efficiency deteriorated for almost every company in the benchmark.

Sales efficiency fell from 68% pre-crash to 30% post-crash, resulting in a 56% deterioration in efficiency. Interestingly, however, for many companies we started to see a rebound in efficiency 6–8 quarters after the trough (as sales efficiency improved from 28% during the crash to 30%).

Cash Burn / Profitability

Finally, we’ve turned our attention to cash burn and profitability. Here we use EBITDA as a proxy for cash flow and look at the evolution of the “rule of 40” over this period (which suggests that a software company’s growth rate + FCF margin should combine to ~40% or more).

Most companies saw significant declines here as well, as sales efficiency deterioration, lower revenue growth and large people costs resulted in lower EBITDA margins.

Companies here saw a 39% decline in profitability, as the median “rule of 40” fell from 41% pre-crash to 25% post-crash.

Summary

The next few quarters will be tough for all of us. The good news is that every company in this benchmark survived the crisis, and went on to become an even bigger company. Recovery rates were also relatively quick, and definitely quicker than other industries (as growth picked up by Q4 2009).

This will be a defining moment for us all, both professionally and personally. It’s more important than ever for all of us to do what we can to plan ahead while also ensuring the wellbeing of our families and communities.

Big thank you to my colleague NK who helped with putting this blog post together!

Source for data: Capital IQ
(1) As Salesforce is on a January year-end, the figures represent quarterly numbers for the periods ending April (Q1), July (Q2), October (Q3) and January (Q4).

Lessons in SaaS from the 2008 downturn — what can we expect? was originally published in Salesforce Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

With 2020 now fully into gear, I wanted to pause for a quick second and look back at some of the milestones and learnings we had in 2019. The startup world moves at breakneck speed, so sometimes a little retrospection goes a long way.

As a global team, we remain committed to backing the best enterprise software companies across all corners of the globe, with a portfolio of over 375 companies today.

A large part of our focus recently has been investing in companies outside the US, as we’ve seen that great software companies can emerge from anywhere in the world. We’re really going big across Europe and Asia Pacific, and here are 6 highlights from our activity last year.

1) Doubling down on Europe with our second fund
Salesforce Ventures landed in Europe in 2015 with the announcement of our first $100M Trailblazer fund. It’s been incredibly rewarding for us getting to back some of Europe’s most ambitious enterprise entrepreneurs since that time and seeing the ecosystem continue to flourish.

Last year marked another milestone, as we announced our second fund with $125M committed for Europe. This is a true testament to the quality of businesses we’re seeing in Europe and our desire to be a long-term partner to the best software companies in the region.

2) Launching our first fund in Australia
We also announced the launch of our inaugural $50M Trailblazer fund in Australia. The region is no stranger to startup successes — with companies like Atlassian and Canva emerging as hugely valuable companies.

Our very own Rob Keith has relocated from San Francisco to lead the charge in Sydney where we have been open for business. We’ve already made 6 investments down under already.

The move is part of a broader focus for us in Asia Pacific (APAC), where we expect to continue to invest over the coming years.

3) Welcoming an incredible group of companies to the portfolio
The work we do wouldn’t be possible without the tireless work of the founders and teams behind each of these stories. Investing is both a partnership and a privilege as we join forces and become a (small) part of their journey.

We were thrilled to welcome companies like Algolia (France), Athena Mortgage (Australia), Basiq (Australia), BigID (Israel), GoCardless (UK), PerimeterX (Israel), Snyk (Israel), Soul Machines (New Zealand), Valiant Finance (Australia), WhiteHat (UK) and Zoomin (Israel) to the portfolio. Thanks for the partnership!

4) Existing investments going from strength to strength
We also celebrated quite a few milestones in the existing portfolio, with companies like Akeneo (France), Forter (Israel), Onfido (UK), OwnBackup (Israel), Privitar (UK), Unbabel (Portugal) and WeFox (Germany) all securing significant follow-on investment with a great set of investors. Although funding is only a means to an end, it’s still a milestone to be celebrated — so congrats!

We were also thrilled to see our portfolio company ClickSoftware getting acquired by Salesforce for $1.35 BN!

5) Establishing deeper connectivity with Salesforce
Post investment, one of our key focus areas is connecting the startups we invest in with the right folks at Salesforce. In doing so, we provide the companies we invest in with unique access to our executives, our know-how and our customers.

As an example, last year we ran deep-dives with our executives on topics ranging from customer success, pricing, sales segmentation, employee retention and product marketing. The feedback has been very positive from our portfolio, as we’re able to share a few plays from the Salesforce playbook. In parallel, we’ve also organized innovation days between our portfolio and our customers, which have been a big hit.

We’re definitely looking to do more of these initiatives in 2020.

6) Broadening our investment focus
At Salesforce Ventures, we always look to invest in companies that are complementary to Salesforce and that help make our customers even more successful. What’s new, however, is that the aperture of what is relevant continues to widen as Salesforce’s footprint expands further in the enterprise market (both organically and through M&A).

Our most recent investments have been in spaces like open source (Snyk), the API economy (Algolia), enterprise automation (Automation Anywhere), data privacy (Privitar and BigID) and security (PerimeterX and Forter).

As I look ahead to this year, our mission will remain the same as we look to invest in the most disruptive companies that are reimagining the enterprise. So if that sounds like you and you think we can help you along the way, do get in touch as we’d love to meet you!

Reflections from 2019: Going Big on Europe and Asia Pacific was originally published in Salesforce Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

Doubling Down on Europe — Our New $125M Fund

I’m excited to announce that this morning Salesforce Ventures launched our new $125M Europe Trailblazer Fund dedicated to backing the best enterprise software startups in Europe. Back in 2015, we launched our first $100M fund in Europe and today we’re doubling down on our commitment.

Over the last ten years, we have accelerated some of the most iconic companies in B2B enterprise globally, and we’re delighted to continue that journey alongside entrepreneurs in Europe. There’s arguably never been a better time to start a SaaS company in Europe, and I’m thrilled that with this fund we’ll be able to support entrepreneurs on their path to building enduring enterprise companies.

As I reflect on both my time in Europe over the last 10 years and also the perspective we’ve developed as the most active corporate VC in Europe, three areas are particularly exciting.

The breadth of our investments

Looking at the portfolio we’ve built in Europe over the last few years, what really stands out to me is the breadth of our investments across the enterprise space. This is, of course, true from a geographical perspective — as we have backed entrepreneurs across 13 countries and 20 cities in Europe. But more importantly, it also rings true from a sector perspective, as we have invested in leading companies in spaces ranging from digital payments, machine vision, content management, blockchain, and the API economy.

Though Salesforce has its origins in the CRM space, our platform today encompasses a unified set of products across service, marketing, commerce, analytics, collaboration, and integration. As our product reach and industry focus have expanded, so too have our investments as the realm of what is strategic has also widened.

Today, it’s a privilege that we get to support some of the most disruptive and fast-growing software companies in Europe — including companies like Akeneo, Bringg, Contentful, FinalCAD, Forter, GoCardless, Onfido, Privitar, Qubit, TechSee, Unbabel, and WeFox.

The enterprise opportunity in Europe is unparalleled

Last year, over €28 billion was invested into startups in Europe¹, reflecting over a 3x growth versus the level in 2013. Of the overall funding, SaaS companies received over 35% of the total. The best companies therefore increasingly have more access to capital than ever. Historically, most of the success (and funding) in Europe was focused on consumer companies, but we are seeing a real shift towards the enterprise.

At the same time, we are now routinely seeing companies exit with considerable liquidity, which creates incredible momentum in the ecosystem — for investors, founders and startup employees. For example, Anaplan started in the UK and is now valued at over $5 billion after its IPO, while NewVoiceMedia sold to Vonage last year for $350M (both were Salesforce Ventures portfolio companies). US investors have also taken note of the European opportunity, as last year they accounted for over 20% of all VC funding in Europe².

Entrepreneurs today with global ambitions have the ingredients needed to build category-defining companies out of Europe, and we are thrilled to be part of that success with this new fund.

We are partners in your success

Salesforce is on track to become the fastest growing enterprise software company to ever reach $20 billion of revenue³. Our goal when investing is to become partners in your success and help accelerate your growth.

We are the only strategic investor that is exclusively focused on backing enterprise cloud startups. With more than 300 investments globally, we have unique insight over how to build a successful SaaS business.

Importantly, we also want to expose our portfolio to the many best practices and insights that have made Salesforce so successful over the years. Whether you’re looking for advice on pricing, customer success, product marketing or how to hire at scale, we can expose you to the experts at Salesforce that run those domains internally. Because Salesforce is a platform, startups can also get access to our customer base of over 150,000 companies globally by integrating into our ecosystem.

When developing our industry and product go-to-market blueprints, we also define what areas Salesforce wants to own, and what areas we want our ecosystem partners to own. By shaping this strategy together, startups we invest in benefit from the scale of our marketing and sales motions through joint customer wins.

Looking ahead

The European startup ecosystem is growing in unprecedented ways. It’s an incredibly exciting time to be an entrepreneur, particularly in the B2B space. With our new $125M Europe Trailblazer Fund, we are excited to back the next generation of software entrepreneurs. So if you’re looking to reimagine the enterprise and think we can be helpful on your journey, please get in touch as we would love to hear from you!

—
¹ Source: Dealroom
² Source: Pitchbook
³ Source: Salesforce Investor Relations

Doubling down on Europe — our new $125M fund was originally published in Salesforce Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.

As centers of innovation continue to emerge all over the world, Salesforce Ventures has made big investments to continue this momentum in the enterprise space. Within the last year, we have launched dedicated regional funds in Canada, Japan, and Australia, and made 75% of our investments outside California. According to CB Insights, Salesforce Ventures is the second-most active Corporate VC (CVC) worldwide.

I’m also delighted to share that in 2018, we were the most active CVC in Europe⁽¹⁾, which is a true testament to the incredible entrepreneurs we’ve been able to support here. We’ve long believed that innovation can come from anywhere in the world. Our activity across Europe is a reflection of that entrepreneurial energy expanding beyond the borders of Silicon Valley. Having been on this side of the pond for some time now, it’s also personally gratifying seeing so many great companies emerge out of Europe.

Last year, over €23 billion was invested across startups in Europe, representing over a 3x growth compared to the level in 2013⁽²⁾. Interestingly, most of this growth has been driven by larger deals, as the sheer number of deals fell in 2018. In parallel, we’re seeing more great opportunities in the B2B / SaaS space than ever before, as SaaS companies received over 20% of the overall funding to exceed €5 billion. Our focus on European investments reflects our belief in the region as an engine for innovation, as well as our commitment to backing the best enterprise entrepreneurs driving that growth.

Our Activity in 2018

Looking at 2018, Salesforce Ventures invested across 9 European countries, which means we’ve now backed entrepreneurs in more than 13 countries across Europe. The majority of our investments last year were in the UK, Germany, Israel and France, which is in line with the broader market⁽²⁾, but we also invested in companies across Portugal, Ireland, Switzerland, Spain and Belgium.

Interestingly, a lot of this activity is occurring outside of the capital cities within each country — such as Oxford and Cambridge in the UK, Hamburg, and Munich in Germany and Nantes and Rennes in France. As we look at our activity in 2019, we are committed to continuing to back great entrepreneurs wherever they may be in Europe.

From a stage perspective, we’re also delighted to support entrepreneurs across the lifecycle. Our ability to invest across multiple stages is a unique differentiator for us in Europe, making us the partner of choice for companies at different stages of growth. Last year, 35% of our investments were Series A, 29% were Series B, 12% were Series C and 24% were Series D or later. We recognize that companies need different value-add across different stages, and we are prepared to support entrepreneurs along that journey as they scale.

Big Exits

Last year was also a big year for us in terms of exits, as we had four European portfolio companies that were acquired in 2018.

NewVoiceMedia
In one of the largest enterprise software M&A exits in Europe, Vonage acquired UK-based NewVoiceMedia for $350 million.

RedKix
Facebook acquired all-in-one email app RedKix for Workplace, Facebook’s enterprise communications app. RedKix, HQ’d in Israel, had raised $17 million before the acquisition.

Emark
Digital agency WPP picked up Dutch-based marketing technology provider Emark as a solution to integrate Salesforce Marketing Cloud and Commerce Cloud.

Fluido
India’s Infosys wanted to expand the reach of its digital transformation business and acquired Finland’s Fluido, one of the largest Salesforce consulting partners in Europe and the leading partner in the Nordics.

Looking at the above, it’s interesting to note that 3 of the 4 exits involved acquirers outside of Europe.

New Investments

In 2018, we also were fortunate to welcome the following exciting new companies to the portfolio in Europe:

• Contentful: headless content management system (alongside Benchmark, General Catalyst, Balderton and Point Nine)
• Unbabel: machine-based language translation for global companies (alongside Notion Capital, Scale Venture Partners, and Samsung NEXT)
• Forter: automated real-time fraud prevention (alongside Sequoia, Scale Venture Partners and NEA)
• FinalCAD: digital transformation and workflow for the construction industry (alongside Draper Esprit, CapHorn, Serena, Aster, and Cathay Innovation)
• Gospel: enterprise data sharing platform built on blockchain (alongside LocalGlobe and IA Ventures)
• Akeneo: product information management platform for e-commerce businesses (alongside Partech and Alven)
• TechSee: AI-powered visual customer engagement (alongside Scale Venture Partners and Planven)
• Copado: deployment and release management for developers (alongside Insight Venture Partners)
• 4C: leading digital transformation partner for Salesforce customers

More Overall Liquidity in Europe

Between exits and new investments, we see a broader trend of increased liquidity in Europe, which is great for the tech ecosystem as a whole. Some notable examples include:

• all-in-one payments platform Adyen IPO’d and is now valued at over $20 billion
• streaming music giant Spotify IPO’d and is now valued at nearly $25 billion
• payments company iZettle sold to PayPal for $2.2 billion
• Anaplan, a Salesforce Ventures portfolio company, IPO’d and is now valued at over $5 billion. A little known fact is that the company was actually founded in the UK and maintains a large R&D presence there

Though most of these companies are outside of the enterprise space, we think the scale of these exits represents an important milestone in the maturity of the European tech ecosystem. We also believe that many of the most promising private companies in Europe are increasingly SaaS businesses, so the balance will continue to shift towards enterprise in the coming years.

Looking Ahead

As I look at our portfolio, it’s also exciting to see the breadth of the companies we’ve been able to back — in spaces ranging from machine-based translation, fraud prevention, content management to enterprise blockchain. As Salesforce’s footprint continues to grow with a bigger product portfolio of our own, the areas of strategic interest for us have also expanded.

We’re already seeing 2019 shape up to be an exciting year for us, and we expect to see even more growth in our investments. To that effect, we’re also hiring another Principal in our London office, so if you’re excited about backing the next generation of enterprise companies in Europe, please reach out.

We also want to take a moment to thank the founders in our portfolio, who are the real agents of change behind this growth. Thank you for your trust, and we look forward to even bigger milestones with you this year!

Sources
¹ Based on Pitchbook data
² Dealroom 2018 Full Year Report. Excludes buyouts, secondary transactions, debt, lending capital, grants

The European Opportunity — Perspectives from Europe’s Most Active CVC was originally published in Salesforce Ventures on Medium, where people are continuing the conversation by highlighting and responding to this story.