This should put a hop in the step of all those Heroku-for-Django startups.
Salesforce Buys Heroku (YC W08) For $212 Million In Cash
41–50 of 205 posts
Re: Salesforce Buys Heroku (YC W08) For $212 Million In Cash
#42So each Heroku app is valued at about $2000?
Re: Salesforce Buys Heroku (YC W08) For $212 Million In Cash
#43This 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…
Activia Live and Jigsaw relate to Salesforce's core CRM business, Sitemasher and Heroku are both cloud hosting platforms. Salesforce has been pushing heavily into the cloud to compete with AWS and Azure (see their recent Database.com announcement), these acquisitions give them a strong position in the market. Heroku in the past has said they plan to offer multiple cloud backends, so it wouldn't surprise me if that's…
"Salesforce has been pushing heavily into the cloud to compete with AWS and Azure"
Just five years too late. They should have built AWS way before anybody else (esp Amazon) did. They were sitting on the opportunity for so long, had a customer base that was already sold on the cloud.
They are now playing catch-up, with acquisitions and the release of Database.com etc.
Huge opportunity missed, the company could have been 4-5x the size it is today.
Re: Salesforce Buys Heroku (YC W08) For $212 Million In Cash
#44heroku 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…
That is a problem with the YC model in that they can't (or don't) fill follow-on rounds and are thus diluted.
Most VCs that invest in an A will set aside 3-4x that to invest in later rounds (Fred Wilson wrote a post about this recently)
(ps. your pre values are way too low (the 3 at A was probably on 10) but the point of dilution still applies. They also would have sliced out a 20-30% option pool at A)
Re: Salesforce Buys Heroku (YC W08) For $212 Million In Cash
#45pg hit the home run on this one
I don't think pg will consider an exit a home run until it exceeds 1B.
Re: Salesforce Buys Heroku (YC W08) For $212 Million In Cash
#46I can see EngineYard opening a bottle to celebrate as well, $212M in 'mostly stock' would be landing a big one, to be landing it in cash is very good indeed.
Congratulations to everybody, especially to the people that brokered the deal on Herokus side, very impressive.
In other news, registrars the world over report a large uptick in domain registrations around the twin themes of rails hosting and sushi...
Re: Salesforce Buys Heroku (YC W08) For $212 Million In Cash
#47Wow. Didn't expect that. Didn't they just do some more capital raising themselves?
I had envisioned Heroku to be a standalone player. It's Paas model was looking like it would be a game-changer. I didn't think they would sell - at least, not this soon. I understand cash is king, but this was a company I had hoped would stand its ground to be something great.
Re: Salesforce Buys Heroku (YC W08) For $212 Million In Cash
#48This should put a hop in the step of all those Heroku-for-Django startups.
I thought that was Google App Engine?
Re: Salesforce Buys Heroku (YC W08) For $212 Million In Cash
#49heroku 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…
s/pg/yc/g
Re: Salesforce Buys Heroku (YC W08) For $212 Million In Cash
#50This sounds like stellar news for Heroku employees and investors. I'm not sure how it's going to be good for Heroku customers (like me) in the long-term. There will be the inevitable brain drain over the course of 1-2years when key staff move away as their contract clauses run out and then we'll be left with Heroku being run by SalesForce :(
Time to start keeping an eye on other hosting solutions. I'm love Heroku and I host a decent number of paying applications on it, but I'm afraid that when the original people will start leaving we'll be left with just another big corporation.