Salesforce cuts out Australian VC arm amid layoffs

When joining Salesforce, Mr. Ferrari was already based in Sydney after serving as Managing Director of In-Q-Tel, a venture capital firm founded by the CIA. His departure leaves Salesforce without local experts to sniff out new deals or work with existing portfolio companies.

Asked about Mr Ferrari’s departure and subsequent absence in Australia, a Salesforce spokesman insisted it did not mean the company’s interest in local tech start-ups was over.

In 2019, Rob Keith, Salesforce Venture’s first employee and principal, relocated from San Francisco to Sydney to run its Australian fund, before moving back home in early 2022. Mr. Keith remains with Salesforce and is responsible for evaluating global opportunities.

“We will manage investment from the US and continue to engage with our 17 portfolio companies as well as the local start-up and venture capital ecosystem,” said an Australian spokesperson for Salesforce.

“We will continue to make new follow-on investments in the Australian market.”

Cut Through Venture data from December last year showed that major US venture capital firms significantly scaled back local deals in the second half of 2022 after plowing large sums of money into the Australian tech sector in 2021.

It found that 17 of Australia’s most active US venture capital firms made just seven investments in the second half of 2022, compared with 28 and 39 in the first two halves.

Tiger Global, the busiest US company in the past three years, made just one investment in the second half of 2022 after making 14 investments in the first half of 2022 and the end of 2021.

In a message to employees announcing the layoffs, Salesforce founder and CEO Marc Benioff blamed the layoffs on overly aggressive hiring in previous years,

“As our revenues accelerated during the pandemic, we hired too many people, causing the recession we now face, and I take responsibility for that,” he wrote.

A Salesforce spokesman declined to say whether 10 per cent of its Australian workforce was involved in the layoffs, or to comment on how many local employees had been let go.

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