Salesforce Venture slashes tech startup funding

By Dave Palmer June 12, 2016

Salesforce Ventures, one of the largest technology space VCs, put a screeching halt to investments in new startups. Its spending is really just too far down to consider it a slow down or a cut back. The metaphorical waterspout of funds for new VC opportunity is at a drip.

Salesforce VC only reported quarterly spending of $22 million compared to $144 million last year, according to Business Insider. In 2015, the company spent more than $366 million on VC investments. In fact, Venture Beat listed Salesforce Ventures as the third most prominent technology VC in 2015 behind Google Ventures and Intel Capital. Its trend for 2016 is sizably lower.

The VC arm of the $50 billion dollar Salesforce, known for cloud software development has large holdings in companies like Dropbox, DocuSign, and Evernote. Its change in strategy marks the beginning of a conservative trend in technology and cloud investments. Technology startups as a result, find it more difficult to raise funds to meet valuations. This is not a completely new trend, as Salesforce’s VC spending initially decreased during the second half of 2015, but spending trends in 2016 show startup investing has all but ceased.

Admittedly, Salesforce has been more active in the Mergers and Acquisition space, and has been aggressively perusing acquisitions. To provide perspective, Salesforce only acquired six companies in 2014 and 2015 combined. That number skyrocketed to seven that Salesforce purchased since third quarter 2015.

Salesforce states on its Venture site that it is still committed to supporting and working with tech startups, and provides a set of tools and offerings for fledgling startups. The company also hosts a community forum that provides technology startup companies an opportunity to share experiences and best practices.

From outward appearances, the company is still interested in technology startups, even if the numbers do not support that assertion. Some speculate that Salesforce’s change in strategy is in response to decreased opportunity available in the market, but more likely, it is a result from loss of growth from its VC portfolio.

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Mobile

Salesforce acquires smart calendar startup Tempo AI

salesforce acquires smart calendar startup tempo ai salesforces app

Tempo, the artificial intelligence calendar app for iOS, has been acquired by Salesforce. Tempo AI, Inc. was founded in 2011 by Raj Singh, Corey Hulen, and Thierry Donneau-Golencer. A note from Tempo’s CEO Raj Singh says the Tempo app will be discontinued on June 30, 2015, and is no longer accepting new users. However, the calendar app is still open to existing users.
Singh said, "With Tempo, we created a smart calendar, using artificial intelligence to enable the next generation of mobile productivity. We brought context to your events and automated many of your tasks, just like a real-world assistant, saving our users millions of minutes,” according to an announcement of the acquisition. Tempo also says that joining Salesforce allows it to “continue our mission at a much larger scale.”

Back in 2013 the startup announced it had raised $10 million in funding. Tempo raised funds from investors including Relay Ventures, Sierra Ventures, Mayfield Fund, Horizon Ventures, Qualcomm Ventures, SingTel Innov8, Miramar Venture Partner, Golden Venture Partners, Seavest Capital Partners, and ENIAC Ventures.
The Tempo app makes it easy to enter in schedule items while on the go. It offered users a pull-down list that features events like call, coffee, meetings, etc. Users could also add a note of the location, select contacts attending the event, and add additional notes.
Tempo originated from SRI International, which is the research institute that gave birth to Siri, the iPhone’s personal assistant. At this time, we’re not sure if Salesforce will use Tempo’s technology or if the firm is going to use Tempo’s engineering talent for new products. Similar to other SRI projects, Tempo is a personal assistant, but it otherwise differs from Siri.
Users who paid for the Tempo calendar app can request a refund through the App Store. Tempo Al started in 2010 and is based in Menlo Park, California.

Web

TechCrunch’s Michael Arrington leaves to start $20M venture capital fund

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TechCrunch founder and co-editor Michael Arrington has resigned from the popular website to launch a venture capital fund to invest in technology startups, reports Fortune. Arrington will reportedly remain with TechCrunch in a limited capacity, as an "occasional contributor."
Joining him in the fund, which will be called "CrunchFund," will be Patrick Gallagher of VantagePoint Venture Partners. Fortune reports that "investors will include many of Silicon Valley's top venture capital firms and tech luminaries."
Arrington and Gallagher reportedly hope to raise $20 million in capital, according to an unnamed source. AOL, which bought TechCrunch las fall and has served as Arrington's employer, is said to be the corner stone limited partner in Arrington's new VC firm. Leading Silicon Valley venture capital firms, including Kleiner Perkins, Greylock, and Sequoia Capital, are said to be investing in CrunchFund.
Neither Arrington nor Gallagher have agreed to comment on the matter.
AOL confirmed with VentureBeat that Arrington will indeed be leaving the company to start CrunchFund; however, VentureBeat's Jolie O'Dell says it was unclear from their conversation with AOL whether CrunchFund "is a venture of Arrington, TechCrunch, AOL or some combination of the three."
The decision for Arrington to no longer serve as TechCrunch's managing editor appears to be primarily an ethical one, as it would be a conflict of interest for Arrington to write about (and, therefore; give free publicity to) startups in which his company had invested — an issue that has long plagued the credibility of TechCrunch, as the publication has written about companies in which Arrington has invested in the past.
Managing editor duties will reportedly go to Eric Shoenfeld.
It's entirely possible, however, that Arrington will follow in the footsteps of New York-based venture capitalist Fred Wilson, who regularly writes about the business of incubator investing, and often talks about the companies in which he has a stake.
Either way, it seems Arrington's role in the tech world is about to expand in a concrete and meaningful way. It will be interesting to see what lies ahead for both Arrington and TechCrunch.
UPDATE: AOL Huffington Post president and editor-in-chief Arriana Huffington has confirmed with Business Insider that Arrington no longer reports to her in any capacity; AOL tells BI that Arrington has completely left the company.
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Computing

Google, Facebook considered buying Twitter for $8-10 billion. A sign of the second tech apocalypse?

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Both Facebook and Google have considered purchasing Twitter for mind-boggling amounts of money, reports the Wall Street Journal — a fact some consider telltale of a new tech bubble.

Insiders do say that both Internet giants have had "low-level talks" with those at Twitter "to explore the prospect of an acquisition of the messaging service." Those talks, however, "have so far gone nowhere."