Salesforce.com is an Internet juggernaut, with a market value of $37 billion and second quarter revenue of $1.32 billion. Now, the San Francisco-based maker of customer relationship management software is taking some of its cash and putting it toward venture investments with a new $100 million fund dubbed Salesforce Ventures.
One of the beneficiaries of that new fund is a small Seattle startup by the name of Venuelabs, which has developed tools to help retailers and restaurants measure in-store experiences by monitoring social media channels. It joins other companies in the Salesforce Ventures portfolio, including DocuSign, InsideSales.com and Skuid.
Venuelabs founder Neil Crist, a former product manager at Jobster and Microsoft, said that its technology helps individual retail store locations pick up on social media chatter across dozens of platforms, whether Foursquare, Twitter or Instagram. That’s a gap not currently addressed by Salesforce.com’s Radian6 group, he said.
“Local is a gap, and they don’t have the capabilities to do location-based monitoring,” said Crist, adding that the investment is a validation of its position in the market.
Venuelabs boasts more than 200 enterprise customers, ranging from Albertson’s to Red Robin to American Golf. Crist said the challenge is that many of the retailers are part of big brands, but each physical location needs to be operated like a local store.
“When customers engage, they need to be able to capture and engage, just like the mom and pop shop down the street,” he said. “We provide them with essentially a pulse, so they can see the consumer activity by channel.”
With just 10 employees, Venuelabs has taken a slightly different approach to the market than some competitors who’ve raised tens of million of dollars in venture funding.
Even withe the Salesforce.com backing, an undisclosed funding round that closed about a year ago, Venuelabs is keeping things lean. To date, it has raised $1.9 million, including cash from angel investors.
Part of the reason for that approach is Crist’s experience at Jobster, a Seattle company which famously burned through tens of millions of dollars in venture funding.
“One of the things I learned is that VC money can have a pretty big impact on the culture of a company in how they grow and the decisions they make,” said Crist. “I made a bit of a commitment to myself when we started this company that we can make better business decisions if we don’t have $20 million in the bank. When we are faced with limited and scarce resources, we make better decisions, plain and simple.”
If the company were to take a large funding round, Crist said they’d be forced to grow at a pace where the likelihood “of your wheels falling off is very high.”
The company’s enterprise business is profitable, and now it plans to make a new push into offering its social media listening tools to smaller local retailers.
In a press release, Salesforce.com said it plans to invest in companies building mobile apps and “connected products” that extend the Salesforce1 Platform. Salesforce.com also holds stakes in fast-growing technology companies such as Box, MongoDB and Domo Technologies.
Crist said it was a no-brainer to take capital from Salesforce.com, since they are a great sounding board and a very successful software-as-a-service business.