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Salesforce has acquired or invested in a number of companies in recent years to extend its product line of business tools and while the company seems to be on a spending spree, its investment strategy follows specific criteria.
Behind that investment strategy is Salesforce Ventures, the company's global corporate investment group, through which Salesforce has acquired some of the 160 companies it has invested in, such as SteelBrick configure-price-quote software. But acquisition is not the primary driver of Salesforce Ventures.
"We sit alongside all the GMs in Salesforce … and we look at the white spaces where don't have coverage. If we aren't building something, and we aren't buying something [to fill that white space], how do we get coverage?" said Matt Garratt of Salesforce Ventures and Corporate Development. "A great way to do that is through investments."
Matt Garratt of Salesforce Ventures and Corporate Development
Salesforce generally avoids investing in very early stage companies that haven't built-out their team or products. To Salesforce, the best companies to invest in are those that are beginning to gain traction in their market; the ones considering which platforms to build on and whether to get into AppExchange -- the companies that bump into Salesforce in the field and want to discuss ways integrate with Salesforce clouds, Garratt said.
"Too many companies come in and say 'Hey, we do cool stuff, Salesforce is awesome, can you take us into the market and help us make a bunch of money,'" Garratt said. "We want to work with companies that are thoughtful, that can paint the narrative for us … we work with them and collaborate and provide a lot of resources to make them more effective in what they are building and in the field. You need to have both sides contributing equally to that."
To hear more about Salesforce Ventures' investment strategy, watch the full video interview from Dreamforce 2016 here.