Salesforce.com, Inc. CRM is set to buy a B2B eCommerce software provider, which will mark the company's second acquisition this year. Though the world's leading customer-relationship management-solution provider has not made any announcement regarding this, the to-be-acquired company - CloudCraze - has revealed this news on its website. However, financial terms of the deal have been kept under wraps.
Founded in 2009, this Chicago-based start-up provides eCommerce platform to enterprises. The company's B2B commerce software is built on Salesforce's platform. Till its formation, CloudCraze had raised more than $30 million through venture funding, according to Crunchbase. Notably, Salesforce's investment arm - Salesforce Ventures - had backed the company's $20-million funding round in 2017. Rationale Behind the Acquisition
The transaction is believed to be beneficial for Salesforce as the acquisition will enhance its capabilities and thereby help capture the growing opportunity in the B2B commerce industry. President and chief customer officer of CloudCraze, Ray Grady, in his blog yesterday, noted that the industry is anticipated to reach a value of $1.2 trillion by 2021 from the $889 billion at present.
Furthermore, CloudCraze has a strong customer base with some big names like The Coca-Cola Company KO
, Adidas, General Electric Company GE
, Cummins CMI
, Ecolab, Land O' Lakes, and WABCO. Therefore, with this acquisition, Salesforce will be able to pitch its existing B2B clients to use CloudCraze's software. Bottom Line
Acquisitions have always been one of Salesforce's key growth strategies. Although the company remained almost silent throughout 2017 on the acquisition front (just one - Sequence), this year it might repeat the likes of 2016, when Salesforce bought 12 companies, to boost its capabilities, and grab newer and larger markets.
We believe Salesforce's continued focus on expanding its business through strategic acquisitions and investments will drive growth over the long run.
Notably, the stock has appreciated 51.6% over the past year, significantly outperforming 40.2% growth recorded by the industry
Currently, Salesforce carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
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