A Year of Resilience: Salesforce Ventures Impact Fund in 2023
Takeaways from Salesforce Ventures’ 2023 Stakeholder Impact Report.
The Salesforce Ventures Impact Fund invests in the most innovative enterprise software companies that drive measurable social and environmental impact. Our investment focus extends across five key areas:
- Climate. Companies creating better access to clean energy, improving resource efficiency, and increasing supply chain performance.
- Education and workforce development. Companies enabling equal access to high-quality education and preparing workers for jobs of the future.
- Diversity, equity, and inclusion. Companies promoting equal opportunity and economic empowerment for women and underrepresented groups.
- Digital health. Companies expanding access and increasing quality of care for underserved groups.
- Social sector technology. Companies amplifying impact for the social sector through technology that increases efficiency and transparency.
We’re proud to support our portfolio with investment, go-to-market advice, Salesforce partnership opportunities, and much more. Collectively, our portfolio companies create widespread positive impact across the communities they serve.
While 2023 featured its fair share of ups and downs, our team is as enthusiastic as ever to back startups and founders developing innovative solutions to confront the most urgent issues facing our world. But before we look ahead, it’s important to reflect on the year we just experienced, and the outputs generated by our portfolio in this year’s Stakeholder Impact Report.
2023 IN Review
2023 was a challenging year for venture capital. Global deal value for the year was less than 50% of the total from 2021, and sectors prioritized by impact investing were not spared from this downturn. Funding to climate tech decreased by 30% over 2022, while edtech funding fell 72% from the previous year. These tough economic conditions naturally impacted female and minority founders. Women-founded U.S. companies raised $34.4B in 2023, down from $44.2B in 2022, while black founders saw their allocation of venture dollars decline for the third year in a row.
Despite these macro headwinds and their adverse effect on the impact investment landscape, we saw reasons for optimism within our target sectors. For starters, investors continue to deploy an increasing amount of capital into impact strategies, signaling a long-term belief in the categories we prioritize. While climate tech investing slowed in 2023, CAGR since 2020 is +23%, and 2023 saw a 29% increase in cumulative funding total to climate tech startups. Additionally, the Inflation Reduction and CHIPS Acts began dispersing capital in 2023, including $3.5B for grid enhancements and $7B for hydrogen fuel hubs. Over 250 clean energy and manufacturing projects have been announced since the Inflation Reduction Act Passed. Salesforce Ventures’ Impact Fund also invested in a number of standout climate tech companies, including Pano and Amini.
On the edtech side, private market stinginess did not translate to the public markets, where a majority of publicly traded edtech companies beat the S&P 500 in 2023. The exit market also remained active for edtech companies in 2023, headlined by Goldman Sachs’ $1.7 billion dollar acquisition of Kahoot!. Additionally, there were some positive signals around funding to female founders. Although overall funding to female founders declined compared to the previous year, the share of capital deployed to female founders in 2023 actually increased (22.8% vs. 18.7% in 2022).
With many indicators pointing towards a market recovery in 2024, we believe now is the time for impact investors to double down on their commitment to founders driving environmental and societal change. The challenges our world faces are only becoming bigger, more dire, and increasingly imminent. We need dedicated capital allocators backing innovators working to foster a more just, equitable, and sustainable world.
Our Impact in 2023
In a year when many founders were forced to do more with less, we’re proud to say our portfolio rose to the occasion. This year’s Stakeholder Impact Report showcases the milestones achieved by companies the Salesforce Ventures’ Impact Fund has invested in.
In 2023, our climate tech portfolio companies collectively helped 45.8 million people gain access to clean energy and reduced 12.7 million metric tons of CO2 [1] (vs. 2.6 million metric tons in 2022). Our edtech portfolio helped 7.5 million students, 7 million adult learners, and 3.4 million low-income learners gain access to quality education. Additionally, 6.1 individuals received access to financial services and 6.3 million individuals received career support through startups in our portfolio dedicated to financial inclusion. Finally, 35.1 million patients received access to expanded healthcare services via startups in our health tech portfolio.
Overall, the Impact Fund’s portfolio directly served 107.8 million people in 2023 while facilitating $72.8M in grants and donations. By composition, 70% of our portfolio companies have a female or underrepresented minority founder or CEO, and 85% feature board members who are female or underrepresented minorities.
Since launching the Salesforce Ventures Impact Fund in 2017, we’ve been proud to see the growing influence our portfolio has had fostering positive social and environmental change in the world. The work continues in 2024, and we’ve already hit the ground running. We’ve closed a handful of investments and have seen deal flow increase across all key sectors. We look forward to meeting and supporting more visionary founders in 2024 who are leveraging technology to foster the changes we want to see in the world.
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If you’re a startup building across climate, edtech, health tech, or DEI, we’d love to talk! To get in touch, email us at impactfund@salesforce.com.
The Year in Photos
Footnote:
[1] This metric is only for U.S. incorporated companies. Underrepresented minority is defined here as those who identify as Black, Indigenous, or LatinX.
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