Salesforce Ventures, the strategic investment arm of the global Software-as-a-Service giant, has launched a $50 million fund for investment in Australian startups, to capitalise on the “healthy, vibrant ecosystem”.
Salesforce Ventures partner Matt Garrett tells StartupSmart the Australia Trailblazer Fund will invest in local innovative products and services that can integrate with Salesforce products and solutions.
The whole mandate of Salesforce Ventures is to “build the world’s largest ecosystem of cloud enterprise software companies”, Garrett says.
Investments in startups tie into the “platform nature of Salesforce”, he adds.
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“Companies can build on our platform an integrate into our product.”
Salesforce Ventures already has offices in San Francisco, London and Japan, and will base its Australian operations in Sydney.
The Sydney office will be headed up by Robert Keith, principal of Salesforce Ventures, who is relocating from San Francisco.
Over 10 years, Salesforce Ventures has invested in some 240 companies, including success stories such as Dropbox and Docusign.
The corporate venture has also already invested in several Australian startups, including Socialsuite, Bugcrowd and Arxxus.
“We’re able to see all this innovation globally and then work with these companies, partner with them, and essentially provide that innovation to our customers,” Garrett says.
A vibrant ecosystem
Garrett says from a macro perspective, for Salesforce, Australia is “a very attractive place to be”.
The past few years have seen “an acceleration in the startup ecosystem”, he says.
Australia is home to a handful of very large, very well-funded startups such as Canva and Deputy, he says, as well as tech companies such as Atlassian that have listed.
“You’re starting to see this ecosystem of people that work with those companies, and that are starting their own companies,” Garrett says.
At the same time, more and more international companies are setting up offices Down Under and growing their Australian presence.
“When you combine those different ingredients … there’s a really healthy, vibrant ecosystem and there are large multinational corporations that continue to grow here — it really breeds the right environment for us to focus and invest.”
In terms of the kinds of startups Salesforce Ventures is looking to invest in, Garrett notes the fund will be looking for “companies that are strategically aligned with us, so we can work together to find mutually beneficial solutions for our customers”.
Although startups don’t necessarily have to be built on the Salesforce platform, there does have to be some “strategic tie in”, he adds — either a solution that can be integrated with the platform or a product already using a Salesforce solution.
In terms of the stage of startups the fund is looking for, Garrett says it’s fairly broad, although “we’re generally not early-seed investors”.
The fund will be looking for companies that already have a product in the market, he says, and that have some understanding of how they would be able to integrate and work with Salesforce.
“Generally, there’s a level of product and customer maturation to be able to do that,” he says.
“Typically, we tend to invest in the earlier stages, but not really early.”
Garrett also breaks down the kinds of technology and industry focus the fund will be keeping an eye out for.
“We’ve been spending a lot of time on AI and machine learning,” he says.
Salesforce Ventures has also made a few investments in virtual and augmented reality technology, as well as in the blockchain space.
In term of the sector, in Australia there’s “a very strong financial services market segment here”, Garrett says, and Salesforce has a lot of clients in that space as well.
However, the fund will also be interested in startups in the retail sector, he says.
“There’s a large retail industry here as well,” he adds.
Understand who you’re pitching to
When it comes to pitching to the Salesforce Ventures fund, Garrett’s advice is the same as it would be to anyone pitching to any investor.
“Really understand who you’re pitching to,” he says.
If a founder has a basic understanding of who the investors are, and how “by working together we could create a much better solution than either of us could individually, that’s super helpful”, he says.
While Salesforce has people working in product and markets that can help with that kind of thing, it’s still good for the founders to understand what the fund is looking for.
“It’s really helpful if they can come thinking about how we could work together,” Garrett says.