Salesforce Snaps Up Sales Software Startup

December 23, 2015, 11:09 PM UTC
The Davos World Economic Forum 2015
Marc Benioff, chairman and chief executive officer of Inc., speaks during a Bloomberg Television interview on day two of the World Economic Forum (WEF) in Davos, Switzerland, on Thursday, Jan. 22, 2015. World leaders, influential executives, bankers and policy makers attend the 45th annual meeting of the World Economic Forum in Davos from Jan. 21-24. Photographer: Simon Dawson/Bloomberg via Getty Images
Photograph by Simon Dawson — Bloomberg via Getty Images

UPDATE, Dec. 24: A statement from SteelBrick CEO Godard Abel has been added to this article.

Salesforce (CSCO) is paying $360 million to buy SteelBrick, one of the many cloud-centric startups that have built a business on top of Salesforce’s software for sales teams.

The deal, disclosed in a regulatory filing on Wednesday, is expected to close before April 30.

SteelBrick sells “quote-to-cash” software that uses data from Salesforce’s customer relationship management system to automate the process of generating sales proposals. It uses data already in the system to automatically suggest pricing for specific scenarios, such as whether it involves a repeat customer.

The SteelBrick software is used by more than 350 businesses, ranging from fast-growing software companies such as Cloudera and Marketo (MKTO), to divisions of conglomerates like Mitsubishi Electric.

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SteelBrick’s previous venture infusion was in mid-October, when it raised $48 million in a round led by Institutional Venture Partners at an unknown valuation. Salesforce Ventures was also an investor in SteelBrick.

Rumors about the acquisition surfaced last week in a report by BusinessInsider, which, at the time, pegged the deal at $600 million. It turned out to be less, after accounting for the Salesforce Ventures investment.

Jason Green, co-founder and general partner at Emergence Capital, which was SteelBrick’s first outside investor in May 2014, said the startup wasn’t seeking a buyer but Salesforce was aggressive in its overtures. “It was a good outcome for the company, in a very short period of time,” Green said. In particular, Salesforce will help the SteelBrick team scale its sales and marketing outreach far more quickly, he said.

“Many of our team members have already enjoyed growing their careers in the vibrant Salesforce ecosystem as customers and partners for many years, and we’re excited to join Salesforce,” said SteelBrick’s CEO Godard Abel, in a blog about the acquisition. Abel was co-founder of Big Machines, a sales automation software company that was acquired by Oracle in 2013.

WATCH: Salesforce CEO Marc Benioff wants to eliminate gender pay gap.

SteelBrick’s most direct competitor is Apttus, which took in another $108 million funding round in early September, boosting its valuation to more than $1 billion. Apttus is expected to go public next year. Market research firm Gartner estimates market opportunity for this sort of software at $41 billion annually by 2018.

This is Salesforce’s biggest acquisition since July 2014, when it paid $390 million for RelateIQ, an application that alerts sales representatives about developments that could have an impact on upcoming pitch meetings. It’s been making much smaller deals, such as the buyout of artificial intelligence software company MinHash earlier this month.

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