S|W: THE SAAS WEEKLY – CAN SALESFORCE REINVIGORATE THE M&A SCENE?

There’s been a flurry of activity in the tech sector recently, signaling a potential turnaround in the deal market. Salesforce, which disbanded its mergers and acquisitions committee a year ago amid pressure to cut spending, is now reportedly in talks to acquire data management software firm Informatica for $10 billion.

Anton Levy, managing director at General Atlantic, indicates that the recent shift in economic sentiment implies a renewed eagerness among corporate buyers to pursue large-scale deals. This observation underscores a notable reversal in the deal-making landscape, with tech executives increasingly inclined to explore significant acquisition opportunities. As economic conditions stabilize and business leaders exhibit greater resilience, there is a growing appetite for M&A activities, signaling a potential uptick in deal volume and strategic transactions within the corporate sphere.

In other news, Vidyard, a Kitchener-Waterloo-based company, secured $21 million CAD in financing last summer to fuel its product and artificial intelligence development efforts. Now, the company has ventured into the AI avatar market with the introduction of AI Avatars feature to its Messages platform. Similarly, Maverix Private Equity and Telus Corp.‘s venture capital arm invested in KODE Labs, Inc., a property software startup based in Detroit. The $30-million financing round led by Maverix will support KODE’s mission to help commercial landlords manage their buildings more efficiently and reduce carbon emissions.

Meanwhile, the federal government’s 2024 budget announcement sparked immediate reactions from the Canadian tech industry. The proposed changes to the capital gains tax, which would increase the inclusion rate on capital gains from 50 percent to 66.7 percent, garnered significant attention and prompted hundreds of Canadian tech leaders to sign an open letter urging Ottawa to reconsider. Additionally, the budget outlined measures related to open banking, real-time payment rails, and initiatives to encourage more investments by Canada’s pension funds.

Rippling, a late-stage HR tech startup, is currently in the process of raising $200 million in new capital, potentially elevating its valuation to $13.4 billion. This substantial fundraising initiative underscores the market’s confidence in Rippling’s growth trajectory and innovative solutions in the human resources management space. The influx of capital is expected to fuel Rippling’s expansion efforts, supporting product development, customer acquisition, and overall business scaling endeavors.

Alberta Innovates, a crown corporation committed to fostering innovation and economic development in Alberta, recently orchestrated a delegation comprising 50 local tech startups to participate in a prominent conference. The primary objective of this initiative is to facilitate deal-making opportunities and cultivate an environment conducive to the growth of Alberta’s tech sector. By showcasing the diverse array of innovative solutions offered by Alberta-based startups, Alberta Innovates aims to attract investment, forge strategic partnerships, and bolster the overall competitiveness of the local tech ecosystem.

Osler, Hoskin & Harcourt LLP, a leading law firm specializing in corporate law and venture capital, has unveiled its third annual study focused on venture capital and growth equity financings. Analyzing data spanning from 2020 to 2023, encompassing 486 anonymized financings valued at approximately US$8 billion, the study offers comprehensive insights into emerging trends, deal structures, and investment strategies within the tech startup landscape. As a valuable resource for founders, investors, and advisors operating within the tech space, Osler’s study provides strategic guidance for navigating the complexities of venture capital financing and driving informed decision-making in the industry.