Salesforce.com acquires SteelBrick
On December 23, 2015, Salesforce.com (CRM) put an end to speculation that had been in the news for a week. It announced the acquisition of SteelBrick for $300 million.
Less than a week before the announcement, The Information reported that Salesforce.com was in talks to buy SteelBrick, a software maker, for approximately $600 million. It will be Salesforce.com’s largest acquisition of 2015. The total value of the Salesforce-SteelBrick deal is approximately $360 million, including $60 million in cash and deducting Salesforce Ventures’ previous investments.
SteelBrick offers Quote-to-Cash software, a suite of backend sell-side applications that simplifies the sales process by automatically generating quotes, contracts, and billing. It enables sales personnel to piece together accurate pricing for deals for potential customers. Quote-to-Cash is the part of the sales cycle that takes over once interested customers step in.
Salesforce.com and Microsoft (MSFT) Dynamics are CRM (customer relationship management) tools that provide a way to maintain basic customer records. With SteelBrick, a salesperson can put together a quote, sign a contract when the customer makes a buying decision, and take care of billing once the deal is done.
How SteelBrick complements Salesforce
SteelBrick runs on the Salesforce.com platform. Based on the Salesforce AppExchange popularity ranking, the app (application) is the most popular third-party Quotes & Orders app. SteelBrick develops CPQ (configure, price, quote) and billing apps.
SteelBrick has raised more than $77 million to date and was estimated to be worth $250 million in October 2015, as reported by CrunchBase. Salesforce.com made its investment in SteelBrick during SteelBrick’s Series B funding round. Salesforce.com was also involved in SteelBrick’s latest Series C round in October 2015.
SteelBrick has 350 customers, including Cloudera, Jive, Marketo (MKTO) and Nutanix. Marketo is a player in the digital marketing space. Adobe (ADBE) commands a leadership position in that space. Intel (INTC) has invested $740 million in Cloudera, a Hadoop vendor.
You can consider investing in the Vanguard Growth ETF (VUG) to gain exposure to Salesforce.com. VUG, which has an exposure of ~12% to application software, invests ~0.55% of its holdings in Salesforce.com.