Congrats to Terry, Ben and the Zendesk team on the formal launch of its CVC unit. Zendesk, which was taken private in 2022 by Hellman & Friedman, Permira and others, plans to dedicate "tens of millions of dollars" to its venture efforts from its balance sheet, CEO Tom Eggemeier told Axios. https://lnkd.in/gyGVWBUD
Coming along other launches of the $50m TravelTech Lab by HBX Group https://lnkd.in/gCq_6Ki7 , Japan's Edion setting up the Y10bn Brand New Retail Initiative Fund https://lnkd.in/gzpGHDkZ and Dunnhumby developing its innovation network https://lnkd.in/gRAcmRsV then it's worth looking a bit deeper to the reasons why.
First, even private equity-backed firms are realising they have to show growth rather than just gearing up and cost-cutting. This is harder to do when costs are being cut post-pandemic where they can be. First-quarter results from larger, public software companies like Salesforce, Workday, and MongoDB all showed enterprise customers are continuing to tighten their wallets, as Akash noted in the Information.
Jai Das, co-founder and managing partner of enterprise software–focused Sapphire Ventures, primarily funded by Germany's SAP, told him in a panel interview at Collision conference in Canada that firms need to be generating at least $500 million in annual recurring revenue, growing at 20% per year, and hence be worth about $5bn to have a chance of floating. Otherwise, they're fodder for incremental M&A. https://lnkd.in/gwAT2dC3
It's smart, therefore, to formalise a CVC unit. Zendesk had backed PolyAI, a voice-based customer service system provider, and UnitQ, a customer feedback collection and analytics startup, over the past few years and remains focused on AI. In the competition for the best deals, however, existing is rarely enough: marketing, benchmarking, training on how to land the value after the deal and a strong peer group of convectors can make all the difference - welcome to www.GlobalVenturing.com
🚀 We're excited to launch Zendesk Ventures today: https://zdsk.co/4c2BHKP
Our new corporate venture arm is dedicated to investing in startups that are transforming customer and employee experience through innovation, primarily AI. Our goal is to accelerate their growth, drive innovation, and create a more connected and responsive ecosystem for our customers.
