Salesforce dedicates $50 million to impact investments
It's a bold move by one of the most aggressive corporate venture capitalists in tech.
One could never accuse Salesforce founder and CEO Marc Benioff of being shy about social and environmental causes.
Not only did he bake an ethos of philanthropy and volunteering into the cloud software firm's corporate model from the very beginning, but he has gone to bat — very publicly — to support causes such as workforce diversity and equity.
Two recent cases in point: Over the past two years, Benioff authorized spending of more than $6 million to close the pay gap between men and women at the cloud software firm. He's also closely aligned with B Team, a non-profit dedicated to the idea that businesses can be at the center of a "new era of sustainable, inclusive business for all." And he has taken a personal interest in causes related to ocean research.
Now Salesforce Ventures — one of the most active investors in the corporate venture capital world — is creating a $50 million fund dedicated explicitly to software startups with working on services for workforce development; tools that promote opportunities for women or under-represented groups; companies creating better access to clean energy options or that improve supply chain performance; and apps that help non-profits or non-governmental organizations achieve their missions and interact with partners, donors and volunteers.
The catch? The entrepreneurs must be using Salesforce applications or technologies to get the job done, just like the other 250-plus companies that the company has funded since 2009. The first four companies in the fund are:
- Angaza Design — A platform that helps businesses and homeowners in places such as Africa finance investments in solar technology. The founder is Lesley Marincola, who once worked on product design for the Amazon Kindle. The company has raised more than $16 million to date; Lauren Powell Jobs was lead investor in its Series B round.
- Ellevest — An investing platform that caters to women, founded by former Citi CFO Sallie Krawcheck. It has raised more than $44.6 million.
- Hustle — A messaging platform — famously used by Bernie Sanders — that was created to help non-profits, schools, training institutes and advocacy groups communicate with donors and constituents. It is backed with more than $11 million.
- Viridis Learning — A talent management service that uses machine learning software to match students at community colleges with potential employers. So far, it has attracted about $7.5 million in funding.
Suzanne DiBianca, chief philanthropy officer for Salesforce and executive vice president for its corporate relations team, said the San Francisco-based company has been flirting with this idea for more than a year. Some of its existing investments, such as fundraising app Classy, have a social bent, but the startups in the new fund will be evaluated using additional metrics, such as their potential for improving the state of the world. That might include measuring the amount of carbon dioxide that a new energy app helps divert or the number of individuals trained in new 21st century careers.
"The Salesforce Impact Fund allows us to support a new generation of startups that are focused on driving positive social change," DiBianca said.
The idea of venture funds dedicated explicitly to make a positive social or environmental impact is hardly new: examples of that sensibility are Obvious Ventures, Omidyar Network, Rethink Impact or Social Capital.
"The launch of Salesforce's $50 million impact investing fund is yet another data point of growing momentum in the field," noted Matt Bannick, managing director of Omidyar Network, in a press release. "With both expertise in venture capital and a fundamental commitment to impact, Salesforce is extremely well-positioned to achieve both financial returns and social impact at scale."
Still, it isn't that common to hear about corporate investment arms using climate change solutions or sustainable business strategies as a lens for their funding strategy. Many companies, instead, have established foundations to advance their corporate philanthropy or humanitarian missions. Even so, data suggests that less than 2 percent of philanthropic funding is focused on issues related to climate change.
One organization that bears closer watching in the months to come is the IKEA Foundation, which in late September supported the We Mean business coalition with a grant of almost $47 million, explicitly dedicated toward initiatives for fighting climate change.
The Autodesk Foundation, led by the design software company's chief sustainability officer, Lynelle Cameron, is also heightening its focus on companies and startups that have placed climate "adaption or mitigation" at the heart of their technologies, applications or business models.
One example is MASS Design Group, a non-profit architectural firm that envisions and constructs buildings that are both sustainable and healthier for their human occupants than most of the local alternatives. Many of the organization's projects are in Africa or in rural areas across the Americas, where architectural skills are in short supply.
So the focus isn't just on designers that are building better structures or products, it's on training communities to build on those methods, Cameron said. "We're looking for companies that have a deep partnership with their community."