Salesforce has announced its decision to acquire Own Co., a startup focused on data backup solutions for cloud applications, in a deal valued at $1.9 billion in cash. The acquisition is slated to be finalized in the quarter ending January 2025, contingent upon regulatory approval, according to a company statement.
Previously known as OwnBackup, the startup was valued at $3.35 billion during a funding round in 2021. Salesforce Ventures, the venture capital arm of Salesforce, had invested in OwnBackup during this and earlier rounds.
This acquisition marks a significant move for Salesforce, reviving its trend of large-scale deals. This follows a strategic shift less than two years ago when Salesforce co-founder and CEO Marc Benioff announced the dissolution of the company’s mergers and acquisitions committee. This decision came amid scrutiny from activist investors questioning the company’s profitability after substantial investments in acquisitions such as MuleSoft and Slack, which had not immediately resulted in substantial growth.
The reduction in Own’s valuation reflects broader challenges within the software industry. In late 2021, interest in cloud software waned as central banks raised interest rates to combat inflation, leading companies to prioritize profitability over expansion. Additionally, enterprises began consolidating their IT budgets, impacting the growth prospects for startups and single-product companies.
Own, originally specializing in Salesforce-related services, has aimed to diversify its offerings by extending support to Microsoft Dynamics and ServiceNow, which compete with Salesforce’s core products.
Salesforce has also recently disclosed plans to acquire smaller startups PredictSpring and Tenyx. The company stated that the acquisition of Own would not affect its shareholder return initiatives and is expected to be accretive to free cash flow starting in the second-year post-acquisition.
Earlier this year, reports suggested Salesforce was considering acquiring data-management software firm Informatica for around $10 billion, though Informatica later confirmed it was not in acquisition talks. Salesforce’s approach to acquisitions remains cautious, with Benioff emphasizing that any large-scale deal must align with customer interests and deliver positive financial metrics.
