The feeling in the air is that the economy is headed toward a global recession. And that puts strong and growing tech companies like Salesforce in a position to go shopping as stock prices and private valuations decline.
During an interview at the World Economic Forum in Davos this week, Bloomberg asked Salesforce CEO Marc Benioff, point blank, if he’s got any plans to step up his acquisitions.
Short answer: probably not.
Benioff said that big acquisitions haven’t really been part of Salesforce strategy for a while. The last big one it did was ExactTarget for $2.5 billion back in 2013. He didn’t plan to shift gears, but he’s keeping his eyes open.
“When you have deflating asset values, and you’re the CEO of a company, you’re going to look at public companies, you’re going to look at private companies, and you’re always going to say ‘Are there other organisations who are going to come in’ [to buy the target company]?” he said.
However, Salesforce will continue to buy smaller startups, and Benioff thinks such companies “might be a little cheaper because capital will be more constrained,” he said.
In the meantime, Benioff is one of many people predicting a bloodbath among the highest valued startups, the so called unicorns that are said to be worth over $1 billion.
He said if such highly valued startups didn’t choose to go public when the economy was hot, they will be in a “very difficult position” when their “lofty valuations” decline. “Those startups will have to raise money at the new reality,” adding, “there’s going to be a lot of dead unicorns.”