Salesforce Buys Heroku (YC W08) For $212 Million In Cash • Hacker News Board

Re: Salesforce Buys Heroku (YC W08) For $212 Million In Cash

#141

Post by hasenj » Wed, Dec 08, 2010, 5:44 PM UTC

plinkplonk wrote: post #18

This is great news for Heroku and YC (congratulations folks!). That said, does anyone have any insights on why exactly SalesForce would buy Heroku? What is the business rationale? "This is Salesforce’s fifth acquisition this year. Earlier purchases include Activa Live, Sitemasher and Jigsaw. Salesforce.com also spent $170 million to fully acquire its Japanese subsidiary, Salesforce Japan." Anyone see a pattern? I don…

Salesforce want to position themselves as a platform-as-a-service provider. They provide the infrastructure for your apps.

Re: Salesforce Buys Heroku (YC W08) For $212 Million In Cash

#142

Post by datsro » Wed, Dec 08, 2010, 5:45 PM UTC

will this affect the pricing model for small ruby builds (Free)? I hope not. As a designer/developer this service has been beneficial to sell Ruby to my more technical clientele.

Re: Salesforce Buys Heroku (YC W08) For $212 Million In Cash

#143

Post by Lewisham » Wed, Dec 08, 2010, 5:47 PM UTC

jedc wrote: post #129

webwright wrote: post #110

Wow- congrats. Great bunch of founders who totally deserve this. I think this is the biggest YC exit, no?

Yes, based on the spreadsheet I keep: https://spreadsheets.google.com/ccc?key=0AkkhSN3vaY4jdF90b1l...

The funny (as in strange, not haha) thing is when I read that 200ish number, the first thing that popped into my head was "that seems cheap." I've either been completely miscalibrated by the supposed GroupOn valuation, or I really liked Heroku.

Probably both.

Re: Salesforce Buys Heroku (YC W08) For $212 Million In Cash

#144

Post by jonknee » Wed, Dec 08, 2010, 5:51 PM UTC

jdludlow wrote: post #118

vidar wrote: post #114

Earlier quoted context omitted.

Since people seem to dislike my comment, I will explain my point. "A home run" means "ultimate success", you can not expect to do any better than that. Since pg has openly stated that he is looking for the next Google/Facebook type company, 212 million is not "a home run". Its still pretty good!

I think the phrase you are looking for is "grand slam."

A walk-off grand slam even.

Re: Salesforce Buys Heroku (YC W08) For $212 Million In Cash

#145

Post by yesno » Wed, Dec 08, 2010, 5:59 PM UTC

notyourwork wrote: post #112

yesno wrote: post #102

Earlier quoted context omitted.

Nothing last forever. Eventually all the "startups that you love" will either close their door or be acquired and I think people should expect that since day 1.

Google? I do not recall them being "acquired".

Google is 1 in a [insert the number of startups from 1998 to 2010]

1:xyz

Re: Salesforce Buys Heroku (YC W08) For $212 Million In Cash

#146

Post by balac » Wed, Dec 08, 2010, 5:59 PM UTC

dawson wrote: post #13

balac wrote: post #3

I'm glad the Heroku guys got a well deserved exit like this. It also makes me more confident to develop on the platform.

Can you explain why, it makes you more confident? (genuinely interested)

The same reasons mentioned above. I've worked with a lot of very fussy clients and have a big name like Salesforce to through out there when discussing options really helps perceived credibility.

Re: Salesforce Buys Heroku (YC W08) For $212 Million In Cash

#147

Post by jedc » Wed, Dec 08, 2010, 6:02 PM UTC

maxer wrote: post #5

pg hit the home run on this one

My back of the envelope calculation over all YC acquisitions so far has them at ~$12million returned. (Over half of that is from Heroku.) That could arguably be anywhere from $5-$20million based on your dilution assumptions, though.

And direct investment costs for 208 startups is Then you start thinking about the other startups yet to exit (ie, Loopt, Dropbox) and you see the YC team is truly kicking ass.

Re: Salesforce Buys Heroku (YC W08) For $212 Million In Cash

#148

Post by gdudeman » Wed, Dec 08, 2010, 6:03 PM UTC

cuchoperl wrote: post #19

heroku 94% pg 6% (early 2008) --- $3M Series A (mid 2008) Assuming a $2M pre-money: heroku 37.6% pg 2.4% series A 60% --- $10M Series B (2010) Assuming a $5M pre-money: heroku 12.5% pg 0.8% series A 20% series B 66.6% --- $212M Exit: heroku $26.5M pg $1.7M series A $42.4 series B $141.3 --- result: series A $3M -> $42.4M // 14X in 2.5 years series B $10M -> $141M // 14X in 1 year pg $17K -> $1.7M // 100X in 3 years A…

Ignition, the lead in the final round, has stated that they made over $50m on the deal, so probably triple that valuation - $10M was on a $25-40m range.

http://www.techflash.com/seattle/2010/12/ignition-backed-her...

Re: Salesforce Buys Heroku (YC W08) For $212 Million In Cash

#149

Post by jcapote » Wed, Dec 08, 2010, 6:04 PM UTC

I just hope some business guy doesn't go in there and "rethink" heroku

Re: Salesforce Buys Heroku (YC W08) For $212 Million In Cash

#150

Post by alain94040 » Wed, Dec 08, 2010, 6:08 PM UTC

tamersalama wrote: post #106

yesno wrote: post #102

Earlier quoted context omitted.

Nothing last forever. Eventually all the "startups that you love" will either close their door or be acquired and I think people should expect that since day 1.

Why are these the only 2 outcomes? Why not grow a business?

Even if they grow, eventually they'll be too big to remain the "friendly cool kid next door."

With 20,000 employees, it's just not the same.

Either way, you can't expect a founder to stick around for 30 years with the same company and product. It takes a Steve Jobs to keep things interesting over decades.