September 12, 2024

Done deal

Hi there,

Here is this week’s Hot or Not.

Hot: Salesforce acquisition spree

Salesforce has done 3 acquisitions in the last 2 months — more than it did all of last year. 

Its latest is data management firm Own (fka OwnBackup), which it bought last week for $1.9B. Salesforce previously partnered with Own, as well as invested in the company via Salesforce Ventures.

The “try before you buy” approach is a hallmark of Salesforce’s strategy.

Mining CB Insights data reveals that nearly half of Salesforce’s acquisitions since 2018 had previously partnered with or received an investment from Salesforce — and many more were in its platform ecosystem. 

We deconstructed the strategy here.

We can also use these clues to predict future M&A targets for the CRM giant.

AI has been a central focus of Salesforce’s recent earnings calls, so to find M&A targets, we looked at AI companies that have previously received investment from Salesforce Ventures (there are 80 of them).

From there, we used our Exit Probability score to reveal the startups our data says are most likely to get acquired.

Here are 4 startups building AI-first solutions that are likely to be on Salesforce’s corporate development radar:

• Jitterbit (data integration)
• Reejig (workforce intelligence)
• Mainstay (AI education & coaching)
• RevComm (voice AI for sales & customer service)

As it turns out, Salesforce has already partnered or integrated with 3 of them.

Customers can dive into the data on each one using this CBI platform search.

Not: Airbase's valuation

Last week, Paylocity acquired Airbase, a spend management platform, for $325M.

That’s a 46% discount on Airbase’s Series B valuation of $600M.

Even so, Series A investors including Bain Capital Ventures, BoxGroup, and First Round Capital still likely did OK. (Not a venture scale outlier, but likely not underwater.)

The spend management space became incredibly crowded in 2020/21 and Airbase never broke out the way some of the big dogs like Brex, Navan, and Ramp have.

In December 2023, I'd predicted Airbase would get acquired by American Express. Logic still holds but got the acquirer wrong.

Hot: Nvidia dealmaking

Nvidia is on track for an even bigger year of dealmaking than last year. 

The company is investing in startups across the AI landscape as it embeds itself (and its chips) further into the ecosystem. 

So far this month, it’s backed rounds to: 

• You.com (AI search) — $50M Series B
• Arsenal Bio (biotech) — $325M Series C
• Wombo (content generation) — $9M Series A
• Superliminal Medicines (drug discovery) — $120M Series A

Learn more about Nvidia’s priorities in our strategy map here. 

Not: Lidar

Autonomous driving company Mobileye is shutting down its internal lidar development.

Lidar sensors create a 3D rendering of a vehicle’s surroundings (it works like a high-tech version of echolocation).

Other companies — most notably Elon Musk’s Tesla — are relying on less expensive technologies like computer vision for self-driving cars. 

Public lidar makers have also faced troubles in recent years: Quanergy filed for bankruptcy in late 2022, while the stocks of companies like Innoviz, Luminar, and Cepton have collapsed. 

Meanwhile, funding to private automotive lidar companies has petered out, and headcount growth is a mixed bag. 

Dive in with more data in our automotive lidar market profile. 

The +1

GP-ew. Align left (or right?).

I love you.

Anand

@asanwal 

P.S. Join our analysts to learn about the emerging markets in energy to watch on September 26. 

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