Salesforce’s VC arm has launched a new $500 million AI fund—doubling the capital it has earmarked for AI investments.
Salesforce Ventures aims to invest in what it calls “ethical AI” and has deployed checks into highly competitive rounds for AI startups like Cohere, Hugging Face and Mistral AI. The VC arm’s deal activity in artificial intelligence this year is on pace to surpass 2022 and 2023 levels, according to Pitchbook data.
Salesforce was one of the first firms to launch a dedicated AI fund, but it’s now far from alone. In July, Menlo Ventures announced a $100 million vehicle in partnership with Anthropic to invest in AI infrastructure and application layers. Earlier this year, Kleiner Perkins closed on $2 billion for two funds with the tagline “Rise with the A.I.”
Corporate VCs like Salesforce Ventures have mandates that go beyond generating returns. This could work to their advantage at a time when sky-high AI valuations have spooked some traditional VCs.
AI companies that Salesforce Ventures invests in may be fast-tracked into the tech giant’s acquisition pipeline, and its portfolio benefits from the software company’s extensive customer network. Salesforce Ventures invests off the company’s balance sheet and doesn’t have external LPs.
Salesforce’s recent $1.9 billion acquisition of cloud data protection provider Own was a long time in the making: The company participated in Own’s Series A in early 2016.
Salesforce Ventures has also backed cloud-based software Vlocity, sales compensation startup Spiff, and administrative software SteelBrick in VC rounds, all of which were later acquired by Salesforce, according to PitchBook data.
Featured image of Salesforce CEO Marc Benioff by Kevin Dietsch via Getty