INSUBCONTINENT EXCLUSIVE:
It been a big news day for Salesforce
It announced that co-CEO Keith Block would be stepping down, and that it had acquired Vlocity for $1.33 billion in an all-cash deal.
It no
coincidence that Salesforce targeted this startup
It a firm that builds six industry-specific CRMs on top of Salesforce — communications, media and entertainment, insurance and financial
services, health, energy and utilities and government and nonprofits — and Salesforce Ventures was also an investor
This would appear to have been a deal waiting to happen.
Brent Leary, founder and principal analyst at CRM Essentials, says Salesforce saw
this as an important target to keep building the business
&Salesforce has been beefing up their abilities to provide industry-specific solutions by cultivating strategic ISV partnerships with
companies like Vlocity and Veeva (which is focused on life sciences)
But this move signals the importance of making these industry capabilities even more a part of the platform offerings,& Leary told
TechCrunch.
Ray Wang, founder and principal analyst at Constellation Research, also liked the deal for Salesforce
Vlocity gives them the industries platform they need
More importantly, it keeps Google from buying them and [could generate] $10 billion in additional industries revenue growth over next four
years,& he said.
Salesforce co-CEO Keith Block steps down
Vlocity had raised about $163 million on a valuation of around $1 billion as of
its most recent round, a $60 million Series C last March
If $1.33 billion seems a little light, given what Vlocity is providing the company, Wang says it because Vlocity needed Salesforce more than
the other way around.
&Vlocity on its own doesn&t have as big a future without Salesforce
So Salesforce doesn&t need to buy them
They could keep building out, but it better for them to buy them now,& Wang said.
Still, the company was valued at $1 billion just under a
year ago, and sold for $1.33 billion after raising $163 million
That means it received 8.2x total invested capital ($1.33 billion/ $163 million invested capital), which isn&t a bad return.
In a blog post
on the Vlocity website, founder and CEO David Schmaier put a positive spin on the deal
&Upon the close of the transaction, Vlocity — this wonderful company that we, as a team, have created, built, and grown into a
transformational solution for six of the most important industries in the enterprise — will become part of Salesforce,& he wrote.
Per
usual, the deal will be predicated on regulatory approval and close some time during Salesforce second quarter in fiscal 2021.
Vlocity nabs
$60M Series C investment on $1B valuation
