Salesforce Startup Ecosystem Gains Momentum with Key Investments and Exits
Editor’s Note: Salesforce Ventures — a strategic venture fund focused 100% on creating the world’s largest ecosystem of enterprise cloud companies — has invested in more than 200 companies since 2009. The following is the first in a series of posts from the Salesforce Ventures team, portfolio company CEOs, and friends in the Salesforce ecosystem intended to inspire those building and growing SaaS businesses by sharing lessons learned, success stories, and insights on where our industry is headed.
2016 was a great year for companies in the Salesforce ecosystem, including several Salesforce Ventures portfolio companies. We’re excited about the momentum we’ve seen already in 2017. Over the past several months, many Salesforce partners have raised a significant amount of funding from leading VCs, and we are seeing the beginning of acquisitions and IPOs as well.
Starting last March, Propel, a product lifecycle management provider built on the Salesforce platform, picked up $4.2 million in a Series A funding round, which included Cloud Apps Capital as an investor. Also in March, Kenandy, an enterprise resource planning solution, raised a $11.5 million Series B from Kleiner, Perkins, Caufield & Byers and Lightspeed Ventures.
Vlocity, which provides industry-specific cloud apps for the Communications & Media, Insurance, Public Sector and Health Industries raised $50 million in funding last September from Sutter Hill Ventures. The company was founded by veterans of Siebel/Oracle and Veeva Systems, another Salesforce platform company.
And even though 2017 is just getting started, we’ve already seen few big raises from Salesforce platform companies.
CloudCraze, a B2B e-commerce company that connects buyers and sellers, landed $20 million in January from Insight Venture Partners. In February, MapAnything raised $33.1 million for its mapping analytics and data visualization tools built natively on the Salesforce platform. And just recently, Samanage, a cloud-based IT help desk solution, raised $20 million from Carmel Ventures and launched their enterprise product on the Salesforce platform.
Beyond capital investments, we’ve also seen some great exits in the ecosystem.
In November of 2016, GE Digital announced the acquisition of ServiceMax, a leading industry provider of field service management software, built on the Salesforce platform, for $915 million. Calling the company’s suite of applications “an essential element to driving GE internal productivity,” GE plans to integrate ServiceMax’s products into its Predix platform, an Internet of Things/Big Data system that gathers, compiles, and analyzes data from GE systems and equipment. (It’s also expected to remain a part of the Salesforce platform).
GE may not be the company you would expect to buy a SaaS company, but the acquisition landscape is in flux these days. The number of non-tech companies, including Unilever, Walmart and GM, that have been investing in and acquiring startups is on the rise dramatically. In 2016, in fact, more Angel/VC-backed U.S. companies in the $1 billion-plus range were bought by non-tech firms than tech firms.
This trend of non-tech buyers acquiring tech companies is likely to continue through 2017 (and beyond) as businesses that were once averse to technological solutions realize the necessity of becoming more tech-enabled. This will be a boom for the overall tech ecosystem and Salesforce platform companies.
In addition to product companies, we are also seeing more consulting partners getting acquired, most recently Appirio which was acquired by Wipro last October. The acquisition will help accelerate Appirio’s growth and give Wipro a greater presence in the Salesforce ecosystem. IBM also acquired Bluewolf, a consulting company that focuses on helping businesses use Salesforce, to extend its reach in the Salesforce ecosystem.
With all of this recent activity and new types of buyers/investors, there’s a lot to be excited about. The momentum has never been better for companies that focus on Salesforce as a strategic partner. Already this year Mulesoft, one of our key integration partners and portfolio companies, just filed their S-1. And we expect that momentum to continue — with additional funding and exit announcements throughout the year.