Salesforce Primes $100 Million For New Startup Fund

By Jay Greene Features Dow Jones Newswires

Salesforce.com Inc. is pumping $100 million into its fourth investment fund, aimed at helping startups develop apps that work with its business software services.

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Salesforce Ventures, the company's corporate investment arm, launched the new Salesforce Platform Fund on Tuesday to support early-stage companies, with the goal of "building an ecosystem of partners around us, " said John Somorjai, executive vice president of corporate development and Salesforce Ventures.

Salesforce is among several tech companies with venture funds that invest in startups for varying reasons. The venture arms of Salesforce, Qualcomm Inc. and Microsoft Corp. tend to focus more on the strategic return to their respective companies. Others, such as Intel Capital and Alphabet Inc.'s GV, are set up like traditional venture-capital funds with the chief goal of delivering financial returns.

More generally, corporate venture capital has gained popularity in recent years as old-line companies have sought to keep up with shifts in technology. Boeing Co., Kellogg Co. and Campbell Soup Co. have all set up venture funds in the past year.

Past Salesforce investments include Web-storage company Box Inc., document-sharing startup DocuSign Inc., and communications software maker Twilio Inc., all of which have services that run on Salesforce's cloud-computing platform. The company has invested in more than 200 startups since 2009, with nearly 50 of those being acquired and eight holding initial public offerings.

Salesforce focuses on startups that already have customers, Mr. Somorjai said. The company's investments, made alongside venture-capital firms, have ranged between $250,000 and $10 million. Salesforce takes ownership stakes under 10% and doesn't seek board seats.

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The new fund aims to provide a boost to companies fueling Salesforce's growth. The company recently stepped up efforts to weave artificial intelligence into its services, and that interest will carry over to its investments.

Salesforce Ventures doesn't disclose its financial returns, but a company regulatory filing noted that the fair-market value of its privately held investments as of Jan. 31 was $758.3 million, and that included $232.3 million in unrealized gains.

Salesforce's previous three funds have invested in mobile technology, European startups and businesses focused on the company's software-development platform. Mr. Somorjai expects to spend the $100 million earmarked for the new fund within two years.

Write to Jay Greene at Jay.Greene@wsj.com

(END) Dow Jones Newswires

May 02, 2017 08:14 ET (12:14 GMT)