Archive

Salesforce is buying data visualization company Tableau for $15.7B in all-stock deal

On the heels of Google buying analytics startup Looker last week for $2.6 billion, Salesforce today announced a huge piece of news in a bid to step up its own work in data visualization and (more generally) tools to help enterprises make sense of the sea of data that they use and amass: Salesforce is buying Tableau for $15.7 billion in an all-stock deal.

The latter is publicly traded and this deal will involve shares of Tableau Class A and Class B common stock getting exchanged for 1.103 shares of Salesforce common stock, the company said, and so the $15.7 billion figure is the enterprise value of the transaction, based on the average price of Salesforce’s shares as of June 7, 2019.

This is a huge jump on Tableau’s last market cap: it was valued at $10.79 billion at close of trading Friday, according to figures on Google Finance. (Also: trading has halted on its stock in light of this news.)

The two boards have already approved the deal, Salesforce notes. The two companies’ management teams will be hosting a conference call at 8am Eastern and I’ll listen in to that as well to get more details.

This is a huge deal for Salesforce as it continues to diversify beyond CRM software and into deeper layers of analytics.

The company reportedly worked hard to — but ultimately missed out on — buying LinkedIn (which Microsoft picked up instead), and while there isn’t a whole lot in common between LinkedIn and Tableau, this deal will also help Salesforce extend its engagement (and data intelligence) for the customers that Salesforce already has — something that LinkedIn would have also helped it to do.

This also looks like a move designed to help bulk up against Google’s move to buy Looker, announced last week, although I’d argue that analytics is a big enough area that all major tech companies that are courting enterprises are getting their ducks in a row in terms of squaring up to stronger strategies (and products) in this area. It’s unclear whether (and if) the two deals were made in response to each other, although it seems that Salesforce has been eyeing up Tableau for years.

“We are bringing together the world’s #1 CRM with the #1 analytics platform. Tableau helps people see and understand data, and Salesforce helps people engage and understand customers. It’s truly the best of both worlds for our customers–bringing together two critical platforms that every customer needs to understand their world,” said Marc Benioff, chairman and co-CEO, Salesforce, in a statement. “I’m thrilled to welcome Adam and his team to Salesforce.”

Tableau has about 86,000 business customers, including Charles Schwab, Verizon (which owns TC), Schneider Electric, Southwest and Netflix. Salesforce said Tableau will operate independently and under its own brand post-acquisition. It will also remain headquartered in Seattle, Wash., headed by CEO Adam Selipsky along with others on the current leadership team.

Indeed, later during the call, Benioff let it drop that Seattle would become Salesforce’s official second headquarters with the closing of this deal.

That’s not to say, though, that the two will not be working together.

On the contrary, Salesforce is already talking up the possibilities of expanding what the company is already doing with its Einstein platform (launched back in 2016, Einstein is the home of all of Salesforce’s AI-based initiatives); and with “Customer 360,” which is the company’s product and take on omnichannel sales and marketing. The latter is an obvious and complementary product home, given that one huge aspect of Tableau’s service is to provide “big picture” insights.

“Joining forces with Salesforce will enhance our ability to help people everywhere see and understand data,” said Selipsky. “As part of the world’s #1 CRM company, Tableau’s intuitive and powerful analytics will enable millions more people to discover actionable insights across their entire organizations. I’m delighted that our companies share very similar cultures and a relentless focus on customer success. I look forward to working together in support of our customers and communities.”

“Salesforce’s incredible success has always been based on anticipating the needs of our customers and providing them the solutions they need to grow their businesses,” said Keith Block, co-CEO, Salesforce. “Data is the foundation of every digital transformation, and the addition of Tableau will accelerate our ability to deliver customer success by enabling a truly unified and powerful view across all of a customer’s data.”

Kustomer raises $40M more led by Tiger Global for its omnichannel approach to CRM

On the heels of customer service company Zendesk announcing an acquisition to expand its omnichannel offering, one of the upstarts nipping at its heels has announced a round of funding to continue growing its own platform.

Kustomer, a customer service startup that calls in data from multiple external channels and the software and apps that a company uses to manage its business internally and speak to customers externally, has raised a Series D of $40 million, led by Tiger Global, with participation from previous investor Battery Ventures. The plan will be to bring in more automation and AI processes to reduce more of the repetitive tasks around CRM — a move specifically aimed to help it target large enterprise customers — and to expand further into Europe, CEO Brad Birnbaum said in an interview.

The valuation is not being disclosed with this round, although Birnbaum noted that it is a “very significant uplift” on its previous valuation. PitchBook, as one data point, notes that in its Series B, it was valued at around $121 million post-money. Adding another $75 million to that (Series C and D together), it’s close to $200 million, although that’s likely lower than its actual valuation now, given that uplift. It has raised just under $114 million to date.

More tellingly, Kustomer has been on a fundraising tear in the last 12 months. It was just in January of this year that it announced a Series C of $35 million. Before that, in June 2018, it raised $26 million. (It was not on the hunt to raise another round so soon, and didn’t need the funding immediately, but it was approached by Tiger with an offer Kustomer did not want to pass up.)

In that time, Birnbaum — who co-founded the startup with Jeremy Suriel in 2015 — has told me multiple times about how Kustomer was increasingly winning more clients off Salesforce and Zendesk, with revenues growing by about 350% in the process, with customers including Ring, Rent the Runway, Glossier, Away, Glovo, Slice and UNTUCKit.

So you might guess that Kustomer’s traction, along with a general swing in terms of what enterprises are looking for in a customer service solution, has had something to do with Zendesk’s own turn toward a more omnichannel approach.

Birnbaum and Suriel know something about how the bigger incumbents work — a previous startup they had worked on together, Assistly (where Birnbaum had been a founder too), was acquired by Salesforce.

Birnbaum does not shy away from talking about how Kustomer is faring against competitors, or why its platform is better than theirs.

“We are most proud of the fact that we do omnichannel really well. On our platform you have a threaded conversation, whereas on others the same input might resolve in four separate tickets,” he said. “In many ways, from a product perspective, I think Zendesk is chasing us, but our product is about 10 years younger.”

Kustomer’s decision to use some of this latest investment to continue building out its automation and AI capabilities lines up with bigger developments that we have seen in enterprise software. Birnbaum, indeed, describes Kustomer’s automation of routine tasks as “a form of RPA” (robotic process automation, which has been one of the fastest-growing areas in enterprise software). “If you’re a retailer and someone ordered a shirt and it’s too small, through the Kustomer platform you can both take the order but also fix it if it’s not the right size, or take the return, rather than passing the customer on to another department,” he said. “You will start to see more and more of these developments as we continue building a system of record beyond a simple CRM tool.”

The next step, he said, will be building even more tools to understand the customer. “We are not a marketing platform today, but already people are using it that way, for example to find recently unhappy customers to send them offers, or do promotional outreach to those who have dropped off on their purchases.”

In addition to Tiger Global joining as an investor, Wendi Sturgis, the CEO of Yext Europe and chief client officer at Yext, has joined Kustomer’s board of directors.

“Kustomer is one of the fastest-growing startups in its space, and I am pleased to join them on their mission to redefine what it means to truly put the customer first, radically shift the approach to customer management and ultimately manifest this in state-of-the-art marketing automation,” she said in a statement. “Plus, when it comes to leadership teams, I am drawn most to disruptors — but only those with the highest integrity. I could not have chosen better, in coming to work with Brad Birnbaum and the incredible team he has assembled.”

Mailchimps Ben Chestnut on bootstrapping a startup to $700M in revenue

The well-known tech startup routine of coming up with an idea, raising money from venture capitalists and other outside investors in increasing rounds as valuations continue to rise, and then eventually going public — or getting acquired — has been around for as long as the myth of Silicon Valley itself. But the evolution of Mailchimp — a notable, bootstrapped outlier out of Atlanta, Ga., that provides email and other marketing services to smaller businesses — tells a very different story of tech startup success.

The company is now closing in on $700 million in annual revenues for 2019, and it seems that it has no intention of letting up, or selling out: No outside funding, no plans for an IPO and no to all the companies that have tried to acquire it (interested parties have included private equity firms as well as big tech players).

As Mailchimp has grown, it has been profitable from day one, a notable contrast not just to many other startups, but those specifically in the area of software-as-a-service for businesses. As a point of comparison, Slack, another provider of communications services to small businesses that is poised to go public, brought in around $130 million last quarter; it is not yet profitable.

This week, Mailchimp is unveiling what is probably its biggest product update since first starting to sell email services almost 20 years ago. It’s launching a new marketing platform that features social media management services, ad retargeting for Instagram and Facebook, domain sales, web development templates; and business intelligence.

There is still a lot of tech left for Mailchimp to tackle, and its model shows that you don’t always need outside funding to do it. The BI foray, as one example, marks an interesting move into artificial intelligence, and tapping the fact that the company is sitting on an intent and interest graph that spans some 4.5 billion people — the aggregation of all the emails that have been sent through Mailchimp’s platform. (Indeed, ‘small business’ for Mailchimp means ‘small number of employees’, but in our digital world, a small business might still be handling millions of customers.)

Adding in those new features will not come free: more pricing tiers, and higher pricing, will take effect from Wednesday for new users. You can read more about that here.

And adding in those new features also comes with another twist: it will catapult Mailchimp into a new arena of competition.

Today, some of the company’s notable competitors are the likes of SendGrid, Intercom and Drip. Tomorrow, that list could expand to include Marketo, Hubspot, InfusionSoft, Hootsuite and many more. While Mailchimp was an early mover and by the company’s own admission was coming into the market at a time when there was very little competition, it will be interesting to see if it can take some of the traction it has picked up to date and bring it to an adjacent — but still entirely new — product segment, and at a higher price, to boot.

I took the opportunity to speak with Mailchimp’s co-founder and CEO, Ben Chestnut — who started the company in Atlanta as a side project with two friends, Mark Armstrong and Dan Kurzius, in the trough of the first dot-com bust — on Mailchimp’s origins and plans for what comes next. The startup’s story is a firm example of how there is definitely more than one route to success in tech.


Ingrid Lunden: You’re launching a new marketing platform today, but I want to walk back a little first. This isn’t your first move away from email. We discovered back in March that you quietly acquired a Canadian e-commerce startup, LemonStand, just as you were parting ways with Shopify. (More on that acquisition here, and the Shopify changes here.)

Ben Chestnut: We wanted to have a tool to help small business marketers do their initial selling. The focus is not multiple products. Just one. We’re not interested in setting up full-blown e-commerce carts. This is about helping companies sell one product in an Instagram ad with a buy button, and we felt that the people at LemonStand could help us with that.

Onfido, which verifies IDs using AI, nabs $50M from SoftBank, Salesforce, Microsoft and more

Security breaches, where malicious hackers obtain snippets of information that then get used to impersonate individuals in order to gain access to individuals’ and businesses’ sensitive financial and other private information, have become par for the course in the world of digital services. More than 2.7 billion records were  breached in a single incident this year in the US, and overall the damage from incidents like these potentially runs into the trillions of dollars globally.

Today, a startup called Onfido, which uses AI techniques combined with human verifiers to efficiently verify people are who they say they are when using digital services — is today announcing $50 million in funding to help address that ongoing — and growing — problem.

The funding comes on the heels of some very strong growth for the startup, which was founded in London but now operates most of its business out of San Francisco. In an interview, co-founder and CEO Husayn Kassai said that more than half of its customers, and most of its new growth, is coming out of the US.

Onfido uses computer vision and a number of other AI-based technologies to verify against some 4,500 different types of identity documents, using techniques like “facial liveness testing,” to see patterns invisible to the human eye, now has 1,500 businesses as customers, primarily in categories like marketplaces and communities, gaming and financial services, including companies like Remitly, Zipcar and Europcar; and in the last year, it had sales growth of 342 percent. Kassai said that it has to date verified “tens of millions” of IDs.

The money — a Series C2, technically — is coming from a group that includes top strategic tech investors. The round is being co-led by SoftBank Investment (SBI) and Salesforce Ventures, with M12 (the new name for Microsoft Ventures), FinVC and other unnamed new and previous investors are also participating. That’s a signal not just of how the biggest companies in that sector today are grappling with this problem, but also what approach they are using to solve it.

For SoftBank, the investment is separate from the Vision fund, founder and CEO Husayn Kassai noted, but it’s notable that a lot of the businesses that have been backed out of that fund — companies like Didi, Uber, Oyo, Lemonade, and others — fundamentally rely on people trusting that they are handling personal details securely while also carefully vetting suppliers on the platform (meaning, they need and use services like Onfido’s).

Meanwhile, both Microsoft and Salesforce have extensive enterprise businesses that could see multiple benefits from working with an identity verification provider, not just for their own purposes, but as a service that is sold on to its customers as part of a larger identity management and security offering.

The company is not revealing its valuation but has raised around $100 million to date and Kassai confirmed that it was an upround, with “a lot of happy investors.”

“We have strong metrics, and we have a long way to go in our growth,” he added.

There are a lot of companies today offering services to help offer secure services to authenticate users, for example, to help them log on to their work accounts or to access their online banking services. Onfido’s business focuses on the first step in all of this — customer onboarding — specifically around services geared towards consumers.

The opportunity that has opened up for it has been the result of more than just a rise in breaches. There’s also been a growing realization that a lot of the existing services that had been used for verification are simply not fit for purpose: either they too have been breached — as in the case of some of the bigger credit agencies like Equifax — or are not realistically efficient enough for how many online services run today, such as in the case of in-person verifications. (Onfido claims that its system can make a verification in as little as 15 seconds.)

Or, they are part of the new guard that has shifted its approach to the business of ID verificiation, either by choice or force. One would-be competitor from the past, Checkr, is now a partner of Onfido’s, Kassai noted. Others like Jumio — which is still grappling with the fallout from major illegal missteps from previous management — seem to still be trying to find their feet as standalone businesses.

“Fraud is rising and not going anywhere,” Kassai — who co-founded the company with Ruhul Amin and Eamon Jubbawy — said. “And the problem is that there are a dozen other companies that have not done a good enough job to detect it so far.” While no service is perfect — Onfido says that its “risk exposure” is 0.0195 percent — he says that the advantage of building its service on top of AI means that the algorithms use every experience to continue honing its accuracy. “What we learn from one client gets applied everywhere,” he notes.

“There has never been a more important time for companies to build trust with their customers by showing they are one step ahead of fraudsters,” said Frank van Veenendaal, the ex-vice chairman of Salesforce, who is joining the board with this round. “I believe Onfido has the unique opportunity to transform the digital identity market and deliver robust and scalable authentication-as-a-service, similar to how Salesforce transformed customer relationship management.”

Close

CONTACT US

Complete the form below and we will get back to you shortly.

  • Subscribe error, please review your email address.

    Close

    You are now subscribed, thank you!

    Close

    There was a problem with your submission. Please check the field(s) with red label below.

    Close

    Your message has been sent. We will get back to you soon!

    Close