Salesforce.com CEO Marc Benioff spoke during a keynote address at the Dreamforce 2023 conference in San Francisco on September 12, 2023.
Marlena Sloss | Bloomberg | Getty Images
Salesforce The company said Thursday it was buying Own Co., a startup that specializes in tools for backing up data in cloud-based applications, for $1.9 billion in cash. Salesforce expects to close the acquisition in the quarter ending January 2025, subject to regulatory approval, analysts reported. statement.
The startup, formerly known as OwnBackup, was valued at $3.35 billion in 2021. Funding roundSalesforce Ventures, the cloud software company’s venture arm, invested in this and an earlier round.
The proposed deal would mark a return of big deals for Salesforce.com Inc. less than two years after co-founder and CEO Marc Benioff said the company’s board of directors would eliminate its mergers and acquisitions committee.
Benioff’s comments came after activist investors bought Salesforce stock and cast doubt on the company’s profitability after the company splurged on big-ticket assets like Mulesoft and Slack but failed to project significant growth.
Own’s decline in value reflects the economic downturn for software companies.
In the second half of 2021, investors have dwindled interest in cloud software, which saw a surge in adoption in 2020 thanks to remote-work policies implemented after COVID-19. Central banks have raised interest rates to stave off inflation, leading loss-making cloud companies to focus on profitability. Companies looking to cut information technology budgets have consolidated purchases, putting strain on single-product companies, including startups and publicly traded companies.
Anaplan, Avalara, Coupa, Everbridge, Qualtrics, Sumo Logic and Zendesk have all been taken private.
Own, which had focused on customer support for Salesforce, was looking to diversify. In a 2021 funding announcement, Microsoft Dynamics enterprise software that competes with Salesforce’s core applications. Service Now It continued.
Salesforce has also revealed plans to acquire smaller startups in recent weeks. Prediction Spring and Tenix.
Salesforce said the acquisition will not affect its shareholder return plan and will be free cash flow accretive starting in the second year after the acquisition closes.
In April, data management software maker Informatica said it was not in any acquisition talks after reports that Salesforce had expressed interest in acquiring the company for around $10 billion.
“We’re going to look at products organically, and of course we’re going to continue to look at them inorganically,” Benioff told analysts on Salesforce’s May earnings call, “but as I’ve promised you, if we look at a significant acquisition, we’re going to make sure it’s non-dilutive to customers, it’s accretive to revenue and has the right metrics.”
clock: Salesforce CEO Marc Benioff talks one-on-one with Jim Cramer
