Alex Kayyal wants to shake the perception that Salesforce Ventures is one of the best corporate venture capital firms out there. Instead, as the new managing partner overseeing its investments, Kayyal wants Salesforce Ventures to be known as one of the best enterprise software investors out there — no "corporate" qualifier needed.
"In many ways, we've kind of stopped thinking of ourselves as [corporate venture capital], and I think that's a big change for us. As I looked at a lot of the companies that we're investing in today, it's remarkable how our remit has grown and our aperture for what kinds of companies we're excited about backing has really expanded tremendously," said Kayyal, who took over as Salesforce's lead after its longtime lead Matt Garratt left in June to join Palo Alto-based venture firm CRV.
Kayyal spent the last six years building out Salesforce Ventures' global presence, starting with Europe and then expanding to overseeing Asia-Pacific and Latin America. His next role will be running the whole thing as the new head of Salesforce Ventures investments, which also includes its impact fund and the newly included Slack Fund.
He's taking the reins at a busy time in the venture capital market. Call it what you will; corporate venture capital set records in the first half of the year. Funding rounds that included CVC backing globally reached $79 billion in the first six months, more than all of 2020 combined, according to CB Insights. Salesforce Ventures was the second most active investor in the first half after Alphabet's investing arm, GV. It surpassed GV, though, when it came to unicorn investments with 18 deals in the first half, including companies like coaching platform BetterUp and African payments company Flutterwave.
International investments will remain a focus under Kayyal, despite the fact that he's relocating from London to the Bay Area to oversee a team of around 40 people.
"A lot of people responded to the pandemic and started backing companies everywhere, and we've been doing it for six, seven, eight years now," Kayyal said. It's invested in companies in 26 countries, and over half the deals it did last year were in international markets, like Hopin, the London-based online events service in which it's grown its stake.
"The distinction of where they're being built is going away," he said, pointing to companies like developer security startup Snyk that started in Tel Aviv and London and is headquartered in Boston.
Kayyal's ambitions aside, the firm's Salesforce ties are still helping it win deals in what's a crazy market for startup investing. With deal valuations and money flowing into venture-backed companies at an all-time high, firms face more competition than ever and good founders tend to have their choice of backers, he said. It's now rare that a single fund takes a whole deal. Instead many deals are being done with a syndicate of investors all bringing different things to the table. "What we're seeing is this incredible momentum, but capital becomes a commodity," he said. "Our focus here is how do we create an unfair advantage."
That's where being a (corporate) venture capital investor gives Salesforce Ventures a leg up. It can dangle its connections to Salesforce and its customers as part of the investment package, and unlike a traditional fund, Kayyal can draw from the corporate balance sheet to continue to double down on its bets. The fund amassed a $2.17 billion gain on investments in 2020, and now it's hoping to do more.
"Our capital deployment has increased a lot; our number of companies has increased a lot," he said. "That's a reflection of the opportunity, but certainly it's also a reflection of our aspiration and what we want to do."
