Salesforce CRM recently launched its second impact fund to invest in enterprise start-ups through the company’s strategic investment arm, Salesforce Ventures. The company had launched its first $50 million impact fund investment plan in 2017. This time, the Customer Relationship Management solutions provider has doubled the fund amount to $100 million.
Salesforce initiated the new impact fund with a socially-positive mission as the company intends to invest in cloud start-ups that address today’s urgent and interwoven global requirements, including climate action, education and reskilling, equity and inclusion, diversity, and providing tech for non-profits and foundations.
Through its 2017 impact fund worth $50 million, Salesforce has invested in more than 25 companies so far that are driving positive social changes. In the last few years, impact investing has gained significant traction as more and more investors and organizations are focused on making a better future for all stakeholders. According to Salesforce, the global market size of impact investment is estimated to increase 40% year over year and reach $715 billion in 2020.
Start-Up Investment: A Key Growth Strategy
Investments in start-ups have always been one of the key growth strategies of Salesforce. Over the past few years, Salesforce has invested in several start-ups, be it through acquisitions or partnerships. According to the company’s website, since 2009, Salesforce Ventures has invested in more than 400 technology start-ups across 22 countries.
Last year, Salesforce announced $125 million of Venture Fund specifically for the European region. The company had allocated a $100-million fund to invest in European start-ups in 2015. For Australia-based start-ups, the firm allocated $50 million of venture fund in 2019. In 2018, it had rolled out venture funds for Japan and Canada worth $100 million each.
salesforce.com, inc. Price and Consensus
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In the past few years, cloud computing has evolved into a flourishing segment in the tech space. The significant opportunity in this space has attracted many companies to build cloud infrastructure and establish their presence as service providers.
We believe Salesforce’s sustained focus on expanding its business through strategic acquisitions and investments will fuel growth over the long run. The company’s strategy of investing in start-ups helps fuel cloud innovation and gain customers across the globe.
Partnerships Helping Expand International Operations
Salesforce's partnership agreements with the likes of Amazon AMZN and Alphabet GOOGL for the firms’ cloud services have been helping it expand its international operations. The company has also entered into an alliance with Apple AAPL, through which it is offering new apps for iPhones and iPads.
Salesforce has also expanded its global strategic alliance with Amazon Web Services to focus on new product integrations that will simplify secure data sharing, and synchronizing across AWS and salesforce services.
Salesforce currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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