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| Helping to make more money for everyone (and not just the wealthy!).
| | Salesforce's mission is to be the world's #1 CRM (Customer Relationship Management) company, focusing on empowering businesses to connect with their customers, partners, and employees in innovative ways. They prioritize customer success, innovation, and social responsibility, guided by core values such as trust, customer obsession, innovation, and equality. |
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| {| class="wikitable"
| | Salesforce operates in cloud-based CRM solutions, providing a wide range of products and services, including sales, marketing, service, analytics, and more. Their key revenue drivers are Salesforce Cloud, Service Cloud, Sales Cloud, Marketing Cloud, and Salesforce Platform. |
| |+ Key information
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| | Risk/return|| High
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| | Price per share|| £10
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| | Asset class|| Equities<ref name=":0">https://find-and-update.company-information.service.gov.uk/company/13169692</ref>
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| | Industry|| Fintech
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| | Country of incorporation|| United Kingdom<ref name=":0" />
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| | Minimum investment amount|| £10
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| | Maximum investment amount|| £500,000
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| | Current valuation|| £4,000,000
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| | Investor type|| All
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| | Tax schemes|| SEIS/EIS
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| | Bid/ask spread|| NA
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| | Commission amount|| Zero
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| | Market|| Private<ref name=":0" />
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| |}
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| ==Summary==
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| * The mission of the company is to help make more money for everyone (and not just the wealthy!).<ref name=":1" />
| | In the CRM market, Salesforce faces competition from companies like Microsoft, Oracle, and SAP. They also invest in sustainability efforts, pledging to reach net-zero greenhouse gas emissions and investing in renewable energy. Salesforce has a strong leadership team and continues to expand its global footprint through acquisitions and partnerships to maintain its position as a CRM market leader and drive innovation. |
| *The company is led by the former principal investment analyst of one of the world's wealthiest persons.
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| *The company’s flagship product is targeted towards Active Investors, who are a group of people that are willing and able to be actively involved in the process of finding suitable investments. The product is an investment research platform. What makes the platform unique is that the research on it is produced open collaboratively. Evidence suggests that open collaborative investment research will, in time, result in Active Investors making better investment decisions, and, ultimately, more money.
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| *To date, the Stockhub platform covers 310 investments<ref name=":2" />, and is growing at a rate of six investments a day<ref>The Stockhub platform was created on 1st March 2022, and the date of the calculation is 18th April 2022, so the platform has been live for 49 days. 310 investments divided by 49 days equates to 6 investments per day.</ref>.
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| *The Stockhub company estimates that the expected return of an investment in the company over the next five years is 55x<ref>The calculation of the investment return figure can be found in the 'Valuation' section of this report.</ref>. In other words, an £1,000 investment in the company is expected to return £55,000 in five years time.
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| * The degree of risk associated with an investment in Stockhub is higher than in a company that's say trading on a public market (such as, HSBC).
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| ==Operations == | | == '''The Idea''' == |
| | Salesforce.com was founded by Marc Benioff in 1999. The idea for the company came about when Benioff, a former Oracle executive, recognized the potential of cloud computing and the need for a more customer-centric approach to business software. |
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| === How did the idea of the company come about?===
| | In 1999, Benioff left his job at Oracle and started to explore opportunities in cloud-based customer relationship management (CRM) software. He believed that businesses could benefit from a CRM system that was accessible over the internet and didn't require the complex and costly infrastructure of traditional CRM solutions. |
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| The idea of the Stockhub company came to the now founder of the company when he developed a strong desire to make more money. Researching into how to make more money, he realised that one of the best ways to do so is to invest in investments. The problem he had was that he didn’t know what to invest in, and deciding what to invest in took him a considerable amount of time. He also realised that there were many people who felt the same way as him, with the average person rating their desire to make more money at 8 out of 10<ref>Stockhub survey.</ref> and the main struggle experienced about making more money being a lack of time<ref>Stockhub survey.</ref>. In his quest to make more money for himself and people like him, the Stockhub company was born.
| | Benioff and his co-founders made a list of potential software solutions, and cloud-based CRM was at the top. They saw the opportunity to revolutionize how businesses manage their customer relationships by making CRM more accessible and user-friendly. |
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| ===What's the mission of the company?===
| | After establishing the company, Benioff and his team developed the software for Salesforce.com. The name "Salesforce" was chosen to reflect the focus on sales and customer relationships. |
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| Stockhub Limited is a company that’s on a mission to help make more money for everyone (and not just the wealthy!).<ref name=":1">https://wiki.stockhub.co:447/main/index.php?title=Stockhub_Wiki:About</ref>
| | Salesforce.com was officially launched in February 2000 as a cloud-based CRM platform. In the beginning, it primarily offered CRM solutions, but Benioff had a broader vision for Salesforce to become a leading cloud-based business software provider. |
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| ===What's the company's main offering(s)?===
| | Today, Salesforce.com offers a wide range of cloud-based solutions beyond CRM, including sales automation, marketing automation, service management, and more. The company's innovative approach to cloud computing has also expanded into artificial intelligence, analytics, and a platform for developing custom applications, making it a major player in the cloud technology industry. |
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| At the moment (as of 15th April 2022), the main and only offering of the company is Stockhub.
| | == '''Mission Statement''' == |
| | Salesforce.com ‘s mission statement is: |
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| ====Who’s the target audience of the company’s flagship product?====
| | We harness technologies that can revolutionize companies, careers, and, hopefully, our world. Salesforce is built on a set of five core values: Trust, Customer Success, Innovation, Sustainability, and Equality. |
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| The audience is Active Investors, who are a group of people that are willing and able to be actively involved in the process of finding suitable investments.
| | This statement reflects Salesforce's commitment to leveraging technology to drive positive change in organizations, careers, and the world, guided by their core values. |
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| ====What's the flagship product?==== | | == '''Segments''' == |
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| The product is an investment research platform.<ref name=":2">https://wiki.stockhub.co:447/main/index.php?title=Main_Page</ref>
| | === Sales === |
| | Salesforce's Sales offering empowers sales teams to streamline and automate their entire sales process, from leads to billing. This comprehensive solution enables sales teams to sell more efficiently, leveraging data storage, lead tracking, opportunity forecasting, analytics, and streamlined quoting and invoicing. It supports flexible working arrangements, aligning with digital-first customer expectations. |
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| ====What makes the flagship product unique?==== | | === Service === |
| | Salesforce's Service offering facilitates personalized customer service and support at scale. It connects service agents with customers through various channels and includes AI-powered chatbots for issue resolution. Additionally, it offers a field service solution for scheduling and managing jobs in real-time, enhancing customer support efficiency. |
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| What makes the platform unique is that it enables investment research to be produced open collaboratively. Evidence suggests that enabling open collaborative investment research will, in time, result in free-to-access, high-quality research on the largest number of investments.<ref name=":4">http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.706.5770&rep=rep1&type=pdf</ref> In other words, it will result in the democratisation of investment research, in turn resulting in Active Investors making better investment decisions, and, ultimately, more money.
| | === Platform and Other === |
| | The Platform offering allows businesses of all sizes to build custom apps efficiently, enhancing customer engagement and enabling digital transformation. It provides security, compliance, and automation features, with integrated services like AI and real-time data processing. Salesforce's acquisition of Slack strengthens collaboration and workflow integration within the Customer 360 platform. |
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| [[File:Stockhub report example.png|centre|400px]]
| | === Marketing and Commerce === |
| | The Marketing offering enables one-to-one customer marketing journeys across multiple channels, promoting real-time personalization and integrated analytics. Commerce unifies the shopping experience across various touchpoints, driving customer engagement and loyalty. Click-to-code tools offer flexibility in adapting to changing customer needs. |
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| ===What's the biggest achievement of the company? === | | === Data === |
| | Salesforce's Analytics offering, including Tableau, empowers users to gain insights from their data, utilizing AI models, trend spotting, and timely recommendations. The Integration offering, powered by MuleSoft, facilitates data connectivity across systems, increasing agility and enabling connected experiences. The Customer Data Cloud, powered by Genie, offers a hyperscale real-time data platform for highly personalized experiences across sales, service, marketing, and commerce. |
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| As of 14th April 2022, the Stockhub platform covers 310 investments.<ref>https://wiki.stockhub.co:447/main/index.php?title=Main_Page</ref>
| | === Industry Verticals === |
| | Salesforce provides industry-specific service offerings, tailored to the needs of sectors like financial services, healthcare, manufacturing, and more. These offerings include out-of-the-box capabilities to accelerate time-to-value and adapt to evolving customer demands. |
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| ===What's the next key milestone of the company?=== | | === Salesforce Easy === |
| | Designed for small and medium-sized businesses, Salesforce Easy offers a purpose-built Customer 360 solution. It simplifies purchase processes, provides out-of-the-box features, and enhances productivity for smaller organizations. |
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| The next key milestone of the company is to increase the number of investments on the platform to 1,000 investments (from 310 investments) by 30th June 2022. | | == '''Revenue breakdown by segment''' == |
| | Salesforce, a global leader in Customer Relationship Management (CRM) solutions, has witnessed significant revenue growth across various segments from 2018 to 2022. The company's diversified revenue streams are a result of strategic initiatives and acquisitions aimed at expanding its product and service offerings. This analysis breaks down Salesforce's segmented revenue and explores the strategies employed to develop these segments. |
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| ==Market==
| | '''Segmented Revenue Breakdown:''' |
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| Stockhub believes that the best monetisation method of the company is advertising. With the advertising method, advertisers pay to promote their offerings on the Stockhub platform. Research suggests that promoting an offering on the Stockhub platform will lead to increased visibility of the offering, and, ultimately, increased offering sales.
| | * Sales: Salesforce's sales segment consistently grew from $4.04 billion in 2018 to $6.83 billion in 2022. This segment primarily represents revenue generated from its core CRM sales solutions. |
| | * Service: The service segment also demonstrated robust growth, increasing from $3.62 billion in 2018 to $7.37 billion in 2022. This revenue category encompasses Salesforce's customer service and support offerings, indicating strong demand for enhancing customer experiences. |
| | * Platform and Other: Salesforce's platform and other services revenue grew from $2.85 billion in 2018 to $5.97 billion in 2022. This segment includes platform-related services and other miscellaneous offerings. |
| | * Marketing and Commerce: The marketing and commerce segment expanded from $1.89 billion in 2018 to $4.52 billion in 2022. This growth reflects Salesforce's efforts to provide comprehensive marketing and e-commerce solutions to businesses. |
| | * Data: Although not reported in 2018 and 2019, Salesforce's data segment contributed $4.34 billion in revenue in 2022. This category includes data-related services and solutions, showcasing the increasing importance of data analytics in CRM. |
| | * Professional Services and Other: Salesforce's professional services and other category grew steadily from $869 million in 2018 to $2.33 billion in 2022. This segment encompasses consulting, implementation, and other services that complement Salesforce's product offerings. |
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| ===What's the total addressable market of the company?===
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| Here, the total addressable market (TAM) is defined as the global advertising market, and based on a number of assumptions<ref group="Note" name="Note01" />, it is estimated that the size of the market as of today (14th March 2022), in terms of revenue, is $850 billion (£635 billion).
| | '''Key Strategies:''' |
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| ===What's the serviceable available market of the company?===
| | * Salesforce has implemented several strategies to develop and bolster its segmented revenue: |
| | * Acquisitions: Salesforce strategically acquired companies that complement its existing portfolio. Notable acquisitions include Tableau (2019) and Slack (2020), which expanded its data and collaboration capabilities. |
| | * Product Diversification: The company continuously diversified its product offerings to cater to various business needs. For instance, its marketing and e-commerce solutions evolved to meet the growing demand for digital marketing and online sales platforms. |
| | * Customer-Centric Approach: Salesforce prioritizes enhancing customer experiences, evident in the significant growth of its service segment. This customer-centric focus includes improving customer support and engagement. |
| | * Data Analytics: The introduction of the data segment highlights Salesforce's emphasis on leveraging data analytics for business insights and decision-making, a crucial component in today's CRM landscape. |
| | * Professional Services: Salesforce expanded its professional services offerings, providing customers with consulting and implementation support, thus enhancing the overall value proposition. |
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| Here, the serviceable available market (SAM) is defined as the global, Active Investor-focused advertising market, and based on a number of assumptions<ref group="Note" name="Note02" />, it is estimated that the size of the market as of today (15th March 2022), in terms of revenue, is $88 billion.
| | Salesforce's impressive revenue growth across segmented categories from 2018 to 2022 underscores its commitment to innovation and diversification. Through strategic acquisitions, product diversification, a customer-centric approach, data analytics, and professional services, Salesforce has solidified its position as a leading CRM provider and continually adapts to meet evolving market demands. This multi-faceted approach has enabled Salesforce to thrive and maintain its leadership in the CRM industry. |
| | | __INDEX__ |
| ===What's the serviceable obtainable market of the company?===
| | __NEWSECTIONLINK__ |
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| Finally, here, the serviceable obtainable market (SOM) is defined as the UK, Active Investor-focused advertising market, and based on a number of assumptions<ref group="Note" name="Note03" />, it is estimated that the size of the market as of today (15th March 2022), in terms of revenue, is $2.8 billion.
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| ==Competition==
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| A key way to determine a product's closest competitors is by looking at other offerings that are targeting the same or similar target audience (i.e. Active Investors) and aiming to provide the same core benefit (i.e. more money), and then ranking the offerings in terms of the total amount of time spent using and/or money spent purchasing the offerings relative to other similar offerings. With that said, according to Stockhub, the closest competitors of its namesake offering are Yahoo Finance, Investing.com, CoinMarketCap, MarketWatch, Seeking Alpha, Goldman Sachs Investment Research and Edison Investment Research. A detailed comparison between Stockhub and some of its main competitors are shown in the table below.
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| {| class="wikitable"
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| |+Competition comparison
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| ! !!Stockhub!!Seeking Alpha!!Goldman Sachs Investment Research!!Edison Investment Research
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| | colspan="5" style="text-align: center;" | How is the research produced?
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| |Type of production method?||Crowdsourced information, decentralized production||End-user-paid-for, crowdsourced information, centralized production||End-user-paid-for, insourced information, centralized production||Sponsor-paid-for, insourced information, centralized production
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| |Is the information on the platform sourced from a large, relatively open, and often rapidly evolving group of participants (i.e. crowdsourced information)? || style="background: green; color: white;" |Yes || style="background: green; color: white;" |Yes || style="background: red; color: white;" |No || style="background: red; color: white;" |No
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| |Is the production of the research controlled by no single entity (i.e. decentralised production)? || style="background: green; color: white;" |Yes || style="background: red; color: white;" |No || style="background: red; color: white;" |No || style="background: red; color: white;" |No
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| | Are contributions able to be made anonymously? || style="background: green; color: white;" |Yes || style="background: red; color: white;" |No || style="background: red; color: white;" |No || style="background: red; color: white;" |No
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| |What is the estimated cost for the investment research company to produce research on a specific investment per year?|| style="background: green; color: white;" |Zero || style="background: orange; color: white;" |£850 || style="background: red; color: white;" |£5,000 || style="background: red; color: white;" |£5,000
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| | colspan="5" style="text-align: center;" |What are the main features of the research for the end-user (i.e. Investors)?
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| |What is the price of the research?|| style="background: green; color: white;" |Free || style="background: orange; color: white;" |$179.99 per year|| style="background: red; color: white;" |$30,000 per year|| style="background: green; color: white;" |Free
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| | How many investments are realistically able to be covered using this method? || style="background: green; color: white;" |Unlimited|| style="background: orange; color: white;" |Limited || style="background: orange; color: white;" |Limited || style="background: red; color: white;" |Very limited
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| |What is the expected quality level of the research?|| style="background: green; color: white;" |High || style="background: orange; color: white;" |Medium || style="background: green; color: white;" |High || style="background: green; color: white;" |High
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| |}
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| ==Team==
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| The company is led by the person who believes in the mission of the company the most: the creator of the company mission. Combined, the members of the team have helped 342 million people - including one of the world's wealthiest persons - make better investment decisions and returns, and helped build some of the world's most renowned digital platforms.
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| ===Chief Executive Officer===
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| [[File:Manos Halicioglu.jpg|200px|Manos Halicioglu]]
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| The Chief Executive Officer of the company is Manos Halicioglu. Over a period of around 11 years, Manos has helped 342 million people - including one of the world’s wealthiest persons (Jim Mellon) - make better investment decisions and returns (at the European Central Bank, Burnbrae Group and Master Investor). He graduated from a world top 6 university (Imperial College) and passed both levels 1 and 2 of the most renowned investment management qualification (Chartered Financial Analyst). Mr. Halicioglu also featured in the press, including CityAM, Bloomberg and Portfolio Institutional.
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| <ref>https://www.linkedin.com/in/emhalicioglu/</ref>
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| ===Chief Technology Officer===
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| [[File:Jitesh Halai.jpg|200px]]
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| The Chief Technology Officer of the company is Jitesh Halai. Over a 23 year period, Jitesh has helped build digital platforms at leading institutions (including Just Eat, Asos and Credit Suisse). He studied Mathematical Sciences at Queen Mary University of London and an Executive Master of Business Administration at Imperial College.<ref>https://www.linkedin.com/in/jiteshhalai/</ref>
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| ===Business Advisor===
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| [[File:Phil-Hollingdale.jpg|200px]]
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| The business advisor of the company is Phil Hollingdale. Phil has founded or co-founded six tech companies, with five successful exits so far. His current business is a digital workplace savings platform that has 400,000 customers and £1.7 billion assets under management (as at March 2022).<ref>https://www.linkedin.com/in/philhollingdale/</ref>
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| ===Compliance Advisor===
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| [[File:Richard Gill.png|200px]]
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| The compliance advisor of the company is Richard Gill. Over a 13 year period, Richard has helped provide compliance oversight at investment research and trading companies (including Crowd for Angels, Align Research and Master Investor). He is approved by the Financial Conduct Authority to perform functions of compliance oversight (CF10) and money laundering reporting (CF11). He is also a CFA charterholder and a graduate of King's College London.
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| ==Financials==
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| ===What are the financial forecasts? ===
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| In keeping in-line with industry standards, the number of years of financial forecasts shown below is five years.
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| ====Income statement====
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| {| class="wikitable"
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| |+Income statement<ref>Source: Stockhub Limited</ref><ref group="Note" name="Note04" />
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| !Year/Item!! Year 1!! Year 2!! Year 3!! Year 4!!Year 5
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| | Year end date||28/02/2022||28/02/2023||28/02/2024||28/02/2025||28/02/2026
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| |Revenues (£'000)||£126.169||£332.681||£842.810||£2,051.447||£4,797.544
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| |-
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| |Gross profits (£'000)||£100.935||£266.145||£674.248||£1,641.158||£3,838.035
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| |Operating profits (£'000)||£25.234||£66.536||£168.562||£410.289||£959.509
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| | Net profits (£'000)||£20.439||£53.894||£136.535||£332.334||£777.202
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| |}
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| === What are the assumptions used to estimate the financial forecasts?===
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| {| class="wikitable"
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| |+Key inputs
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| !Description
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| !Value
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| !Commentary
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| | colspan="3" |<div style="text-align: center;">'''Revenue'''</div>
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| |What's the estimated current size of the total addressable market?
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| |£635,325,000,000
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| |Here, the total addressable market (TAM) is defined as the global advertising market, and based on a number of assumptions<ref group="Note" name="Note01" />, it is estimated that the size of the market as of today (14th March 2022), in terms of revenue, is £635 billion (or $850 billion).
| |
| |-
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| |What's the estimated terminal annual growth rate of the total addressable market?
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| |3%
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| |Research shows that the growth rate of the global advertising market (i.e. the total addressable market) is similar to the growth rate of global gross domestic product<ref>http://www.robertpicard.net/files/econgrowthandadvertising.pdf</ref>, which has averaged (medium) around 3% per year in the last 20 years (2001 to 2022)<ref>https://www.macrotrends.net/countries/WLD/world/gdp-growth-rate</ref>.
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| |What's the estimated Stockhub peak market share?
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| |2%
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| |Research shows that there's an almost perfect positive correlation between the amount of adverting revenue generated on a platform and the total amount of time spent by users on the platform. In other words, the more time users spend on a platform, the more advertising revenue the platform generates. Accordingly, Stockhub believes that the best measurement unit of future advertising market share is time. In UK broadcasting, there's a limit on the amount of advertising that can be shown to viewers, and the limit is 15% of 24 hours (i.e. around 9 minutes per hour or around 216 minutes a day). Research suggests that Active Investors represent around 10.4% of the global population and that the average amount of time Active Investors spend researching investments is 30 minutes per day. Consequently, the Stockhub company estimates that the peak market share of its namesake platform is around 2%, and, therefore, suggests using the share amount here.
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| |Which distribution function do you want to use to estimate Stockhub revenue?
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| |Gaussian
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| |Research suggests that the revenue pattern of companies is similar to the pattern produced by the Gaussian distribution function (i.e. the revenue distribution is bell shaped)<ref>http://escml.umd.edu/Papers/ObsCPMT.pdf</ref>, so Stockhub suggests using that function here.
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| | What is the estimated Stockhub lifespan?
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| |50 years
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| |Stockhub's vision is to be a large organisation (more than 10,000 employees), and research shows that the average lifespan of a large corporation is around 50 years.<ref>Stadler, Enduring Success, 3–5.</ref>
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| |What's the estimated standard deviation of Stockhub revenue?
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| |5 years
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| |Another way of asking this question is this way: within how many years either side of the mean does 68% of revenue occur? The Stockhub company suggests using 5 years (i.e. 68% of all sales happen within 5 years either side of the mean year), so that's what's used here.
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| |-
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| | colspan="3" |'''<div style="text-align: center;">Growth stages</div>'''
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| |How many main stages of growth is Stockhub expected to go through?
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| |4 stages
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| |Research suggests that a company typically goes through four distinct stages of cash flow growth.<ref>Levie J, Lichtenstein BB (2010) A terminal assessment of stages theory: Introducing a dynamic approach to entrepreneurship. Entrepreneurship: Theory & Practice 34(2): 317–350. <nowiki>https://doi.org/10.1111/j.1540-6520.2010.00377.x</nowiki></ref> Research also shows that incorporating those stages into the discounted cash flow model improves the quality of the model and, ultimately, the quality of the value estimation.<ref>Stef Hinfelaar et al.:, 2019.</ref>
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| In addition, research shows that a key way to determine the stage which a company is in is by examining the cash flow patterns of the company.<ref>Dickinson, 2010.</ref> A summary of the economic links to cash flow patterns can be found in the appendix of this report. Stockhub estimates that with its operating and investing cash flows both negative (-) and its financing cash flows positive (+), the company is in the first stage of growth (i.e. the introduction stage), and, therefore, it has a total of four main stages of growth.
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| |What's the expected duration of growth stage 1?
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| |17 years
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| |Research suggests that given the expected lifespan of the company (i.e. 50 years), 17 years is suitable for stage 1.<ref name=":6">http://escml.umd.edu/Papers/ObsCPMT.pdf</ref>
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| |-
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| |What's the expected duration of growth stage 2?
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| |4 years
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| |Research suggests that given the expected lifespan of the company (i.e. 50 years), 4 years is suitable for stage 2.<ref name=":6" />
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| |-
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| |What's the expected duration of growth stage 3?
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| |8 years
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| |Research suggests that given the expected lifespan of the company (i.e. 50 years), 8 years is suitable for stage 3.<ref name=":6" />
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| |-
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| |What's the expected duration of growth stage 4?
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| |21 years
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| |Research suggests that given the expected lifespan of the company (i.e. 50 years), 21 years is suitable for stage 4.<ref name=":6" />
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| |-
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| | colspan="3" |'''<div style="text-align: center;">Growth stage 1</div>'''
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| |-
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| | Cost of goods sold margin (%)
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| |20%
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| |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 1)<ref name=":7">http://people.stern.nyu.edu/adamodar/pdfiles/papers/younggrowth.pdf</ref>, and the margin for its peers was 20%.
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| |-
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| |Selling, General and Administrative expenses margin (%)
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| |80%
| |
| |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 1)<ref name=":7" />, and the margin for its peers was 80%.
| |
| |-
| |
| |Tax rate (%)
| |
| |19%
| |
| |Research suggests that it's best to use the marginal tax rate of the country in which the company mainly operates. The Stockhub company mainly operates in the United Kingdom, and the marginal tax rate there is 19%.
| |
| |-
| |
| |Depreciation rate (%)
| |
| |10%
| |
| |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 1)<ref name=":7" />, and the margin for its peers was 10%.
| |
| |-
| |
| |Fixed capital margin (%)
| |
| |25%
| |
| |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 1)<ref name=":7" />, and the margin for its peers was 25%.
| |
| |-
| |
| |Change in working capital (£000)
| |
| |Zero
| |
| |Stockhub suggests that for simplicity, the change in working capital figure is zero.
| |
| |-
| |
| | colspan="3" |'''<div style="text-align: center;">Growth stage 2</div>'''
| |
| |-
| |
| | Cost of goods sold margin (%)
| |
| |20%
| |
| |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the margin for its peers was 20%.
| |
| |-
| |
| |Selling, General and Administrative expenses margin (%)
| |
| |60%
| |
| |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the margin for its peers was 60%.
| |
| |-
| |
| |Tax rate (%)
| |
| |19%
| |
| |Research suggests that it's best to use the marginal tax rate of the country in which the company mainly operates. The Stockhub company mainly operates in the United Kingdom, and the marginal tax rate there is 19%.
| |
| |-
| |
| |Depreciation rate (%)
| |
| |10%
| |
| |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the margin for its peers was 10%.
| |
| |-
| |
| |Fixed capital margin (%)
| |
| |25%
| |
| |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the margin for its peers was 25%.
| |
| |-
| |
| |Change in working capital (£000)
| |
| |Zero
| |
| |Stockhub suggests that for simplicity, the change in working capital figure is zero.
| |
| |-
| |
| | colspan="3" |'''<div style="text-align: center;">Growth stage 3</div>'''
| |
| |-
| |
| | Cost of goods sold margin (%)
| |
| |20%
| |
| |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the margin for its peers was 20%.
| |
| |-
| |
| |Selling, General and Administrative expenses margin (%)
| |
| |40%
| |
| |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the margin for its peers was 40%.
| |
| |-
| |
| |Tax rate (%)
| |
| |19%
| |
| |Research suggests that it's best to use the marginal tax rate of the country in which the company mainly operates. The Stockhub company mainly operates in the United Kingdom, and the marginal tax rate there is 19%.
| |
| |-
| |
| |Depreciation rate (%)
| |
| |10%
| |
| |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the margin for its peers was 10%.
| |
| |-
| |
| |Fixed capital margin (%)
| |
| |25%
| |
| |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the margin for its peers was 25%.
| |
| |-
| |
| |Change in working capital (£000)
| |
| |Zero
| |
| |Stockhub suggests that for simplicity, the change in working capital figure is zero.
| |
| |-
| |
| | colspan="3" |'''<div style="text-align: center;">Growth stage 4</div>'''
| |
| |-
| |
| |Cost of goods sold margin (%)
| |
| |20%
| |
| |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the margin for its peers was 20%.
| |
| |-
| |
| |Selling, General and Administrative expenses margin (%)
| |
| |40%
| |
| |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the margin for its peers was 40%.
| |
| |-
| |
| |Tax rate (%)
| |
| |19%
| |
| |Research suggests that it's best to use the marginal tax rate of the country in which the company mainly operates. The Stockhub company mainly operates in the United Kingdom, and the marginal tax rate there is 19%.
| |
| |-
| |
| |Depreciation rate (%)
| |
| |10%
| |
| |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the margin for its peers was 10%.
| |
| |-
| |
| |Fixed capital margin (%)
| |
| |25%
| |
| |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the margin for its peers was 25%.
| |
| |-
| |
| |Change in working capital (£000)
| |
| |Zero
| |
| |Stockhub suggests that for simplicity, the change in working capital figure is zero.
| |
| |}
| |
|
| |
|
| ==Risks == | | == '''Leadership''' == |
| | Marc Benioff is the Chair, CEO, and Co-Founder of Salesforce, a global leader in CRM software. Under his leadership, Salesforce has become a Fortune 150 company with 75,000 employees and is recognized for innovation and equality. Benioff has received numerous accolades for his leadership, including being named "Innovator of the Decade" by Forbes and one of the "World’s 25 Greatest Leaders" by Fortune. He is also known for his philanthropy, creating the 1-1-1 model of philanthropy on day one of Salesforce to improve communities worldwide. Benioff and his wife have donated extensively to healthcare, education, and environmental causes. He is the owner of TIME and author of "Trailblazer: The Power of Business as the Greatest Platform for Change." |
|
| |
|
| As with any investment, investing in Stockhub carries a level of risk. Overall, based on the key risks highlighted below, the degree of risk associated with an investment in Stockhub is higher than in a company that's trading on a public market (such as, HSBC).
| | Parker Harris, Co-Founder and CTO of Salesforce, oversees the company's technology vision and has been instrumental in driving its technology strategy, including initiatives like Hyperforce and Lightning Experience. He's passionate about cloud computing's role in digital transformation. Before Salesforce, he co-founded Left Coast Software and worked in sales force automation. Harris holds a B.A. in English literature from Middlebury College. |
|
| |
|
| ===Early-stage investment===
| | Amy Weaver serves as President and CFO at Salesforce, leading the global finance organization. Before this, she was Chief Legal Officer, overseeing legal and corporate affairs at Salesforce. Her background includes legal roles at Expedia Group Inc., Cravath, Swaine & Moore, and Perkins Coie, along with work in legislative aid and clerking. She serves on several boards and holds a JD from Harvard Law School. |
|
| |
|
| Stockhub Limited is at one of the earliest stages of the business lifecycle, and the failure rate of companies at that stage is usually much higher than those at a later stage.
| | Ariel Kelman is the President and Chief Marketing Officer at Salesforce, responsible for global marketing efforts. He has a background in economics with a Bachelor of Arts from the University of California, Berkeley. Ariel has previously worked at Salesforce and served as CMO at Oracle and AWS before rejoining Salesforce in 2023. |
|
| |
|
| ===Illiquid investment===
| | Brian Millham serves as President and COO at Salesforce, overseeing various key functions including sales, customer success, marketing, and more. He has been with Salesforce for over 23 years and has played a significant role in the company's growth and development. Brian's background includes experience at Oracle and Remedy Corporation, and he holds a Bachelor of Arts from the University of California, Berkeley. He also serves on the board of Newsela, an education technology company. |
|
| |
|
| The number of transactions in shares of private companies is usually significantly lower than in public companies, typically resulting in it taking longer to sell shares in private companies at a price that is at least equal to the price that the shares were bought at. Accordingly, the Stockhub investment opportunity is considered to be higher risk than more liquid companies.
| | David Schmaier serves as the President and Chief Product Officer at Salesforce, leading the company's global product strategy and vision. He brings over three decades of experience in enterprise software and CRM. David was previously the CEO of Salesforce Industries, and before that, he co-founded and led Vlocity. He holds a B.A. in mechanical engineering from Rensselaer Polytechnic Institute and an MBA from Harvard Business School. |
|
| |
|
| ==Valuation==
| | Juan Perez is EVP and CIO at Salesforce, responsible for the global IT team and advising customers on digital transformations. Previously CIO at UPS, he's been recognized for his leadership in technology adoption and received awards like the Forbes CIO Innovation Award. Juan holds degrees in industrial and systems engineering. |
|
| |
|
| ===What's the expected return of an investment in Stockhub?===
| | Kendall Collins is the Chief Business Officer and Chief of Staff to Marc Benioff at Salesforce. He oversees strategic initiatives and customer relationships for the Office of the Chair and CEO, as well as the global communications team. Kendall has held various executive roles at Salesforce and other companies, driving innovation and marketing strategies. He holds a B.S. in commerce and has extensive experience in the tech industry. |
|
| |
|
| The Stockhub company estimates that the expected return of an investment in the company over the next five years is 55x. In other words, an £1,000 investment in the company is expected to return £55,000 in five years time. The assumptions used to estimate the return figure can be found in the table below.
| | Miguel Milano is the President and Chief Revenue Officer at Salesforce, responsible for global sales and distribution. He has a successful track record in international sales, previously led sales organizations at Salesforce, and held leadership positions at companies like Oracle, McKinsey, and Telefonica. Miguel has engineering degrees and an MBA from MIT's Sloan School of Management. |
|
| |
|
| Assuming that a suitable return level over five years is 10% per year and Stockhub achieves its expected return level (of 55x), then an investment in the Stockhub company is considered to be a 'suitable' one.
| | Nathalie Scardino is Salesforce's interim Chief People Officer, responsible for the global people strategy, employee engagement, and business value. She has over a decade of experience at Salesforce, including roles in recruiting, onboarding, and employee learning. Nathalie has a background in sales and executive search, focusing on technology and digital transformation. She serves on the board of San Francisco Youth Theatre and holds a B.A. from Goldsmiths, University of London. She resides in San Francisco with her family. |
|
| |
|
| For those in the UK: Stockhub is SEIS and EIS eligible, a key benefit of which is that those who invest now can claim back up to 50% of the investment amount in income tax relief. Accordingly, the estimated expected return of investing in the business is even higher for UK-citizens (than non-UK citizens).
| | Sabastian Niles serves as Salesforce's President and Chief Legal Officer, responsible for global legal and government affairs. With a background as a partner at Wachtell, Lipton, Rosen & Katz, he has extensive experience in corporate transformations, governance, mergers, and sustainability. Sabastian is affiliated with various organizations, including the Aspen Institute, and holds a law degree from Harvard Law School, as well as degrees in finance, economics, and decision and information sciences from the University of Maryland. |
|
| |
|
| === What are the assumptions used to estimate the return?===
| | Sarah Franklin, President & Chair of the Advisory Board at Salesforce, has over 15 years of experience within the company. She previously served as Chief Marketing Officer and has been dedicated to empowering individuals in technology careers. She played a significant role in launching Trailhead, Salesforce's online learning platform. Sarah has received recognition on Forbes' Most Influential CMO list and holds degrees in chemical engineering and biochemistry from Virginia Polytechnic Institute and State University. |
|
| |
|
| {| class="wikitable"
| | Srini Tallapragada, President and Chief Engineering Officer of Salesforce, oversees a global engineering team responsible for developing and securing the Salesforce Customer 360 and Hyperforce. With over a decade at Salesforce, Srini has driven product and platform innovations. Prior to joining Salesforce in 2012, he held roles at Oracle and SAP. Srini holds a PGDM from XLRI and a BTech in Computer Science from NIT, India. He also serves as an independent director on the board of Avalara. |
| |+Key inputs
| |
| !Description
| |
| !Value
| |
| !Commentary
| |
| |-
| |
| |Which valuation model do you want to use?
| |
| |Discounted cash flow
| |
| |There are two main approaches to estimate the value of an investment:
| |
| #By calculating the present value of the investment's expected future cash flows (i.e. discounted cash flow valuation); and
| |
| #By comparing the investment to other similar investments (i.e. relative valuation).
| |
|
| |
|
| Research suggests that the discounted cash flow valuation approach is more accurate<ref name=":5">Demirakos et al., 2010; Gleason et al., 2013</ref>, so that's the approach that Stockhub suggests to use here; nevertheless, for completeness purposes, separately, the valuation of the company is also estimated using the using the relative valuation approach (the valuation based on the relative approach can be found in the appendix of this report).
| | Suzanne DiBianca, EVP & Chief Impact Officer at Salesforce, has been with the company for over 20 years. She co-founded the Salesforce Foundation and leads Salesforce’s stakeholder capitalism strategy, focusing on ESG efforts, climate action, and the Salesforce Ventures Impact Fund. Suzanne pioneered the 1-1-1 model of corporate philanthropy and is involved in various UN and World Economic Forum councils, as well as serving on multiple advisory boards. She is a graduate of the University of Colorado at Boulder. |
| |-
| |
| |Which financial forecasts to use?
| |
| |Stockhub
| |
| |The only available forecasts are the ones that are supplied by the Stockhub company (the forecasts can be found in the financials section of this report), so Stockhub suggests using those.
| |
| |-
| |
| | colspan="3" |'''<div style="text-align: center;">Growth stage 1</div>'''
| |
| |-
| |
| |Discount rate (%)
| |
| |25%
| |
| |There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity is by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital.
| |
|
| |
|
| | == '''Ownership structure''' == |
| | The provided data offers a glimpse into the ownership structure of Salesforce, a prominent company in the Customer Relationship Management (CRM) market. The ownership structure of Salesforce reflects a substantial presence of institutional investors and mutual funds, which is typical for a large, publicly traded company in the technology sector. Salesforce's appeal to institutional investors may be attributed to its position as a leading CRM software provider and its role in the broader technology industry. |
|
| |
|
| Research indicates that companies in the first stage of the business lifecycle are often held by either undiversified owners or by partially diversified venture capitalists.<ref name=":7" /> Consequently, it does not make sense to assume that the only risk that should be priced in is the market risk; the cost of equity has to incorporate some (in the case of venture capitalists) or maybe even all (for completely undiversified owners) of the firm specific risk.
| | Notably, Vanguard and Blackrock, both giants in the investment management industry, hold significant stakes in Salesforce. This suggests a high level of confidence in the company's growth potential and long-term prospects. |
| |-
| |
| |Probability of success (%)
| |
| |20%
| |
| |Research suggests that a suitable rate for a company in this growth stage (i.e. stage 1) is 20%.
| |
|
| |
|
| |-
| | The presence of various mutual funds, particularly those tracking major stock indices like the S&P 500, indicates that Salesforce is a component of many diversified investment portfolios. This inclusion underscores Salesforce's prominence within the technology sector and its influence on broader market performance. |
| | colspan="3" |'''<div style="text-align: center;">Growth stage 2</div>'''
| |
| |-
| |
| |Discount rate (%)
| |
| |15%
| |
| |There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital.
| |
| |-
| |
| |Probability of success (%)
| |
| |50%
| |
| |Research suggests that a suitable rate for a company in this growth stage (i.e. stage 2) is 50%.
| |
|
| |
|
| |-
| | Overall, Salesforce's ownership structure reflects a diverse mix of institutional and retail investors, showcasing the company's appeal to a broad range of stakeholders. It's worth noting that while institutions dominate the ownership landscape, individual investors and mutual funds also play pivotal roles in shaping the company's shareholder base. |
| | colspan="3" |'''<div style="text-align: center;">Growth stage 3</div>'''
| |
| |-
| |
| |Discount rate (%)
| |
| |10%
| |
| |There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital.
| |
| |-
| |
| |Probability of success (%)
| |
| |100%
| |
| |Research suggests that a suitable rate for a company in this growth stage (i.e. stage 3) is 100%.
| |
|
| |
|
| | {| |
| | |'''Top Institutional Holders''' |
| | | |
| | | |
| | | |
| |- | | |- |
| | colspan="3" |'''<div style="text-align: center;">Growth stage 4</div>''' | | |'''Holder''' |
| | |'''Shares (millions)''' |
| | |'''% of Total''' |
| | |'''Value (million USD)''' |
| |- | | |- |
| |Discount rate (%) | | |Vanguard Group Inc |
| |10% | | |83.2 |
| |There are two key risk parameters for a firm that need to be estimated: its cost of equity and its cost of debt. A key way to estimate the cost of equity by looking at the beta (or betas) of the company in question, the cost of debt from a measure of default risk (an actual or synthetic rating) and apply the market value weights for debt and equity to come up with the cost of capital. | | |8.5% |
| | |17,041.6 |
| |- | | |- |
| |Probability of success (%) | | |Blackrock Inc. |
| |100% | | |70.6 |
| |Research suggests that a suitable rate for a company in this growth stage (i.e. stage 4) is 100%. | | |7.3% |
| | | |14,467.3 |
| |- | | |- |
| | colspan="3" |'''<div style="text-align: center;">Other key inputs</div>''' | | |State Street Corporation |
| | |45.7 |
| | |4.7% |
| | |9,351.2 |
| |- | | |- |
| |What's the current value of the company? | | |FMR, LLC |
| |£4,000,000 | | |37.9 |
| |As at 23rd February 2022, the Stockhub company estimates the current value of its company at £4 million. | | |3.9% |
| | |7,757.9 |
| |- | | |- |
| |Which time period do you want to use to estimate the expected return? | | |Morgan Stanley |
| |Between now and five years time | | |19.6 |
| |Stockhub suggests that to account for general market cyclicity, it's best to estimate the expected return of the company between now and five years time. | | |2.0% |
| |} | | |4,006.3 |
| | |
| ===Sensitive analysis===
| |
| | |
| The main inputs that result in the greatest change in the expected return of the Stockhub investment are, in order of importance (from highest to lowest):
| |
| | |
| #The discount rate (the default time-weighted average rate is 15%);
| |
| #The probability of success rate (the default time-weighted average rate is 71%); and
| |
| #Stockhub peak market share (the default share is 2%)
| |
| | |
| The impact of a 50% change in those main inputs to the expected return of the Stockhub investment is shown in the table below.
| |
| | |
| {| class="wikitable sortable"
| |
| |+Stockhub investment expected return sensitive analysis
| |
| ! Main input
| |
| !50% worse
| |
| !Unchanged
| |
| !50% better
| |
| |- | | |- |
| |The discount rate | | |Capital World Investors |
| |10x | | |19.2 |
| |55x | | |2.0% |
| |412x | | |3,941.4 |
| |- | | |- |
| |The probability of success rate | | |Geode Capital Management, LLC |
| |14x | | |17.8 |
| |55x | | |1.8% |
| |88x | | |3,643.2 |
| |- | | |- |
| |Stockhub peak market share | | |Price (T.Rowe) Associates Inc |
| | | |15.2 |
| |27x | | |1.6% |
| |55x | | |3,107.3 |
| | 82x | |
| | |
| |}
| |
| | |
| ==Actions==
| |
| | |
| To invest in Stockhub, click [mailto:hello@stockhub.co here].
| |
| | |
| To contact Stockhub, click [mailto:hello@stockhub.co here].
| |
| | |
| ==Appendix==
| |
| | |
| ===Relative valuation approach===
| |
| | |
| ====What's the expected return of an investment in Stockhub?====
| |
| | |
| The company estimates that the expected return of an investment in Stockhub over the next five years is 57x. In other words, an £1,000 investment in the company is expected to return £57,000 in five years time.
| |
| | |
| Assuming that a suitable return level over five years is 10% per year and Stockhub achieves its expected return level (of 57x), then an investment in the Stockhub company is considered to be a 'suitable' one.
| |
| | |
| ====What are the assumptions used to estimate the return figure?====
| |
| {| class="wikitable"
| |
| |+Key inputs
| |
| !Description
| |
| !Value
| |
| !Commentary
| |
| |- | | |- |
| |Which type of multiple do you want to use? | | |Fisher Asset Management, LLC |
| |Growth-adjusted EV/sales | | |13.9 |
| |For the numerator, Stockhub believes that to account for the different financial leverage levels of its peers, it's best to use enterprise value (EV), rather than price. For the denominator, Stockhub believes that because it expects to reinvest almost all of its revenue back into the business over the five year forecast period and therefore its earnings are expected to be abnormally low over the period, it's best to use sales. Accordingly, Stockhub suggests valuing its company using the EV/sales ratio. However, Stockhub feels that to take into account the different business lifecycle stages of its peers, the most suitable valuation multiple to use is the growth-adjusted EV/sales multiple<ref group="Note" name="Note15" />, rather than the EV/sales multiple. | | |1.4% |
| | |2,845.5 |
| |- | | |- |
| |In regards to the growth-adjusted EV/sales multiple, for the sales figure, which year to you want to use? | | |JP Morgan Chase & Company |
| | Year 5 | | |13.6 |
| |Stockhub suggests that with sales forecast to grow exponential over the five year forecast period, it's best to use forward-looking data, rather than historic data. | | |1.4% |
| | | |2,776.3 |
| | |
| In regards to the growth-adjusted EV/sales multiple, for the sales figure, Stockhub suggests that in order to account for the forecasted exponential growth of the business, it's best to use one at the end of the forecast period (i.e. Year 5).
| |
| |- | | |- |
| |In regards to the growth-adjusted EV/sales multiple, for the sales growth figure, which year(s) do you want to use? | | | |
| | Year 6 to 8, from now | | | |
| |Stockhub suggests that for the sales growth figure, it's best to use Year 6 to 8. | | | |
| | | |
| |- | | |- |
| |In regards to the growth-adjusted EV/sales multiple, what multiple figure do you want to use? | | | |
| |42x | | | |
| |Stockhub's vision is for the Stockhub platform to be one of the most successful advertising platforms, and for that reason, it sees its closest peers as the owners of the leading advertising platforms. Those platforms are Facebook, Google Search, Youtube, Twitter, WhatsApp, Instagram and SnapChat. Note: Facebook, Instagram and WhatsApp are all owned by Meta Platforms, Inc, and Google Search and Youtube are all owned by Alphabet, Inc. The average multiple for those companies is 42x. | | | |
| | | |
| |- | | |- |
| |Which financial forecasts to use? | | | |
| |Stockhub | | | |
| |The only available forecasts are the ones that are supplied by the Stockhub company (the forecasts can be found in the financials section of this report), so Stockhub suggests using those. | | | |
| | | |
| |- | | |- |
| |What's the current value of the Stockhub company? | | |'''Top Mutual Fund Holders''' |
| |£4,000,000 | | | |
| |As at 23rd February 2022, the Stockhub company estimates the current value of its company at £4 million. | | | |
| | | |
| |- | | |- |
| |Which time period do you want to use to estimate the expected return? | | |'''Holder''' |
| |Between now and five years time | | |'''Shares (millions)''' |
| |Stockhub suggests that to account for general market cyclicity, it's best to estimate the expected return of the company between now and five years time. | | |'''% of Total''' |
| |} | | |'''Value (million USD)''' |
| | |
| ====Sensitive analysis====
| |
| | |
| The main inputs that result in the greatest change in the expected return of the Stockhub investment are, in order of importance (from highest to lowest):
| |
| | |
| #The growth-adjusted EV/sales ratio (the default value is 42x);
| |
| #Stockhub peak market share (the default value is 2%).
| |
| | |
| The impact of a 50% change in those main inputs to the expected return of the Stockhub investment is shown in the table below.
| |
| | |
| {| class="wikitable sortable"
| |
| |+Stockhub investment expected return sensitive analysis
| |
| ! Main input
| |
| !50% worse
| |
| !Unchanged
| |
| !50% better
| |
| |-
| |
| |Growth-adjusted EV/sales ratio
| |
| |28x
| |
| |57x
| |
| |86x
| |
| |-
| |
| |Stockhub peak market share
| |
| | |
| |28x
| |
| |57x
| |
| |86x
| |
| |}
| |
| ===Stockhub peers===
| |
| | |
| {| class="wikitable sortable"
| |
| |+Valuation table
| |
| |- | | |- |
| !Investments!!Industry!!Enterprise value/sales!!1-year forward revenue growth rates (%)!!Growth-adjusted enterprise value/sales ratio
| | |Vanguard Total Stock Market Index Fund |
| | |28.9 |
| | |2.9% |
| | |5,915.5 |
| |- | | |- |
| |Meta Platform Inc.||Internet content & communication||8.04x||19.20%|| style="background: blue; color: white;" |42x | | |Vanguard 500 Index Fund |
| | |23.1 |
| | |2.3% |
| | |4,735.1 |
| |- | | |- |
| |Alphabet Inc.||Internet content & communication||7.80x||16.80%|| style="background: blue; color: white;" |46x | | |Fidelity 500 Index Fund |
| | |11.0 |
| | |1.1% |
| | |2,245.5 |
| |- | | |- |
| | Snap Inc.||Internet content & communication||22.71x||39.00%|| style="background: blue; color: white;" |58x | | |SPDR S&P 500 ETF Trust |
| | |10.8 |
| | |1.1% |
| | |2,217.6 |
| |- | | |- |
| |Twitter Inc.||Internet content & communication||8.60x||21.20%|| style="background: blue; color: white;" |41x | | |iShares Core S&P 500 ETF |
| | | |8.9 |
| | |0.9% |
| | |1,828.1 |
| |- | | |- |
| |Robinhood Inc.||Software - Infrastructure||17.69x||23.30%|| style="background: blue; color: white;" |75x | | |Vanguard Growth Index Fund |
| |} | | |8.0 |
| | | |0.8% |
| Note: five years after incorporation (i.e. April 2018), Robinhood’s valuation was $5.6 billion, and it was trading on a growth-adjusted EV/sales ratio of 43x.
| | |1,642.4 |
| | |
| ===Economic links to cash flow patterns ===
| |
| {| class="wikitable"
| |
| |+Economic links to cash flow patterns
| |
| |- | | |- |
| !Cash flow type!!Introduction!!Growth!!Shake out!!Mature!!Decline
| | |Vanguard Institutional Index Fund-Institutional Index Fund |
| | |7.0 |
| | |0.7% |
| | |1,435.4 |
| |- | | |- |
| |Operating|| style="background: red; color: white;" |-|| style="background: green; color: white;" |+ | | |Growth Fund Of America Inc |
| | style="background: orange; color: white;" | +/-|| style="background: green; color: white;" |+|| style="background: red; color: white;" |- | | |6.4 |
| | |0.6% |
| | |1,318.2 |
| |- | | |- |
| |Investing|| style="background: red; color: white;" |-|| style="background: red; color: white;" |-|| style="background: orange; color: white;" |+/-|| style="background: red; color: white;" |- | | |SPDR Dow Jones Industrial Average ETF |
| | style="background: green; color: white;" | + | | |5.6 |
| | |0.6% |
| | |1,146.3 |
| |- | | |- |
| |Financing|| style="background: green; color: white;" |+|| style="background: green; color: white;" |+|| style="background: orange; color: white;" |+/-|| style="background: red; color: white;" |-|| style="background: orange; color: white;" |+/- | | |Fundamental Investors Inc |
| | |5.3 |
| | |0.5% |
| | |1,080.5 |
| |} | | |} |
|
| |
| ==Notes==
| |
|
| |
| '''Note 1: Calculation of the global advertising market size'''
| |
|
| |
| Global advertising revenue = World nominal Gross Domestic Product (GDP) x Advertising revenue as a share of GDP
| |
|
| |
| = $85,000 billion (2020, The World Bank) x 1% (2015, Federal Reserve Bank of Philadelphia)
| |
|
| |
| = $850 billion.
| |
|
| |
| Other key assumptions: World nominal Gross Domestic Product and advertising revenue as a share of GDP are unchanged since 2020 and 2015, respectively.
| |
|
| |
| '''Note 2: Calculation of the global, Active Investor-focused advertising market size'''
| |
|
| |
| Global, Active Investor-focused advertising revenue = Global advertising revenue x Active Investors as a proportion of the total population
| |
|
| |
| = $850 billion (2022, Stockhub) x 10.4% (2022, Stockhub)
| |
|
| |
| = $88.4 billion.
| |
|
| |
| Other key assumptions: Global advertising revenue and Active Investors as a proportion of the total population are unchanged since 2022 and 2022, respectively.
| |
|
| |
| '''Note 3: Calculation of the UK, Active Investor-focused advertising market size'''
| |
|
| |
| UK, Active Investor-focused advertising market size = UK nominal Gross Domestic Product (GDP) x Advertising revenue as a share of GDP x Active Investors as a proportion of the total population
| |
|
| |
| = 2,708 billion (2020, The World Bank) x 1% (2015, Federal Reserve Bank of Philadelphia) x 10.4% (2022, Stockhub)
| |
|
| |
| = $2.8 billion.
| |
|
| |
| Other key assumptions: UK nominal Gross Domestic Product, advertising revenue as a share of GDP and Active Investors as a proportion of the total population are unchanged since 2020, 2015 and 2022, respectively.
| |
|
| |
| '''Note 4: Income statement estimates'''
| |
|
| |
| All figures in the Income Statement table are estimates.
| |
|
| |
| '''Note 5: Calculation of the growth-adjusted EV/sales ratio'''
| |
|
| |
| The growth-adjusted EV/sales ratio is calculated by dividing the EV/sales ratio by the 1-year forward revenue growth rate. For example, for the Meta Platforms growth-adjusted EV/sales ratio, the calculation is as follows: 8.04 dividend by 0.1920 ≈ 42.
| |
|
| |
| ==References==
| |
| <references />
| |
| <references group="Note" />
| |
| [[Category:Equities]]
| |
| [[Category:United Kingdom]]
| |
Salesforce's mission is to be the world's #1 CRM (Customer Relationship Management) company, focusing on empowering businesses to connect with their customers, partners, and employees in innovative ways. They prioritize customer success, innovation, and social responsibility, guided by core values such as trust, customer obsession, innovation, and equality.
Salesforce operates in cloud-based CRM solutions, providing a wide range of products and services, including sales, marketing, service, analytics, and more. Their key revenue drivers are Salesforce Cloud, Service Cloud, Sales Cloud, Marketing Cloud, and Salesforce Platform.
In the CRM market, Salesforce faces competition from companies like Microsoft, Oracle, and SAP. They also invest in sustainability efforts, pledging to reach net-zero greenhouse gas emissions and investing in renewable energy. Salesforce has a strong leadership team and continues to expand its global footprint through acquisitions and partnerships to maintain its position as a CRM market leader and drive innovation.
The Idea
Salesforce.com was founded by Marc Benioff in 1999. The idea for the company came about when Benioff, a former Oracle executive, recognized the potential of cloud computing and the need for a more customer-centric approach to business software.
In 1999, Benioff left his job at Oracle and started to explore opportunities in cloud-based customer relationship management (CRM) software. He believed that businesses could benefit from a CRM system that was accessible over the internet and didn't require the complex and costly infrastructure of traditional CRM solutions.
Benioff and his co-founders made a list of potential software solutions, and cloud-based CRM was at the top. They saw the opportunity to revolutionize how businesses manage their customer relationships by making CRM more accessible and user-friendly.
After establishing the company, Benioff and his team developed the software for Salesforce.com. The name "Salesforce" was chosen to reflect the focus on sales and customer relationships.
Salesforce.com was officially launched in February 2000 as a cloud-based CRM platform. In the beginning, it primarily offered CRM solutions, but Benioff had a broader vision for Salesforce to become a leading cloud-based business software provider.
Today, Salesforce.com offers a wide range of cloud-based solutions beyond CRM, including sales automation, marketing automation, service management, and more. The company's innovative approach to cloud computing has also expanded into artificial intelligence, analytics, and a platform for developing custom applications, making it a major player in the cloud technology industry.
Mission Statement
Salesforce.com ‘s mission statement is:
We harness technologies that can revolutionize companies, careers, and, hopefully, our world. Salesforce is built on a set of five core values: Trust, Customer Success, Innovation, Sustainability, and Equality.
This statement reflects Salesforce's commitment to leveraging technology to drive positive change in organizations, careers, and the world, guided by their core values.
Segments
Sales
Salesforce's Sales offering empowers sales teams to streamline and automate their entire sales process, from leads to billing. This comprehensive solution enables sales teams to sell more efficiently, leveraging data storage, lead tracking, opportunity forecasting, analytics, and streamlined quoting and invoicing. It supports flexible working arrangements, aligning with digital-first customer expectations.
Service
Salesforce's Service offering facilitates personalized customer service and support at scale. It connects service agents with customers through various channels and includes AI-powered chatbots for issue resolution. Additionally, it offers a field service solution for scheduling and managing jobs in real-time, enhancing customer support efficiency.
Platform and Other
The Platform offering allows businesses of all sizes to build custom apps efficiently, enhancing customer engagement and enabling digital transformation. It provides security, compliance, and automation features, with integrated services like AI and real-time data processing. Salesforce's acquisition of Slack strengthens collaboration and workflow integration within the Customer 360 platform.
Marketing and Commerce
The Marketing offering enables one-to-one customer marketing journeys across multiple channels, promoting real-time personalization and integrated analytics. Commerce unifies the shopping experience across various touchpoints, driving customer engagement and loyalty. Click-to-code tools offer flexibility in adapting to changing customer needs.
Data
Salesforce's Analytics offering, including Tableau, empowers users to gain insights from their data, utilizing AI models, trend spotting, and timely recommendations. The Integration offering, powered by MuleSoft, facilitates data connectivity across systems, increasing agility and enabling connected experiences. The Customer Data Cloud, powered by Genie, offers a hyperscale real-time data platform for highly personalized experiences across sales, service, marketing, and commerce.
Industry Verticals
Salesforce provides industry-specific service offerings, tailored to the needs of sectors like financial services, healthcare, manufacturing, and more. These offerings include out-of-the-box capabilities to accelerate time-to-value and adapt to evolving customer demands.
Salesforce Easy
Designed for small and medium-sized businesses, Salesforce Easy offers a purpose-built Customer 360 solution. It simplifies purchase processes, provides out-of-the-box features, and enhances productivity for smaller organizations.
Revenue breakdown by segment
Salesforce, a global leader in Customer Relationship Management (CRM) solutions, has witnessed significant revenue growth across various segments from 2018 to 2022. The company's diversified revenue streams are a result of strategic initiatives and acquisitions aimed at expanding its product and service offerings. This analysis breaks down Salesforce's segmented revenue and explores the strategies employed to develop these segments.
Segmented Revenue Breakdown:
- Sales: Salesforce's sales segment consistently grew from $4.04 billion in 2018 to $6.83 billion in 2022. This segment primarily represents revenue generated from its core CRM sales solutions.
- Service: The service segment also demonstrated robust growth, increasing from $3.62 billion in 2018 to $7.37 billion in 2022. This revenue category encompasses Salesforce's customer service and support offerings, indicating strong demand for enhancing customer experiences.
- Platform and Other: Salesforce's platform and other services revenue grew from $2.85 billion in 2018 to $5.97 billion in 2022. This segment includes platform-related services and other miscellaneous offerings.
- Marketing and Commerce: The marketing and commerce segment expanded from $1.89 billion in 2018 to $4.52 billion in 2022. This growth reflects Salesforce's efforts to provide comprehensive marketing and e-commerce solutions to businesses.
- Data: Although not reported in 2018 and 2019, Salesforce's data segment contributed $4.34 billion in revenue in 2022. This category includes data-related services and solutions, showcasing the increasing importance of data analytics in CRM.
- Professional Services and Other: Salesforce's professional services and other category grew steadily from $869 million in 2018 to $2.33 billion in 2022. This segment encompasses consulting, implementation, and other services that complement Salesforce's product offerings.
Key Strategies:
- Salesforce has implemented several strategies to develop and bolster its segmented revenue:
- Acquisitions: Salesforce strategically acquired companies that complement its existing portfolio. Notable acquisitions include Tableau (2019) and Slack (2020), which expanded its data and collaboration capabilities.
- Product Diversification: The company continuously diversified its product offerings to cater to various business needs. For instance, its marketing and e-commerce solutions evolved to meet the growing demand for digital marketing and online sales platforms.
- Customer-Centric Approach: Salesforce prioritizes enhancing customer experiences, evident in the significant growth of its service segment. This customer-centric focus includes improving customer support and engagement.
- Data Analytics: The introduction of the data segment highlights Salesforce's emphasis on leveraging data analytics for business insights and decision-making, a crucial component in today's CRM landscape.
- Professional Services: Salesforce expanded its professional services offerings, providing customers with consulting and implementation support, thus enhancing the overall value proposition.
Salesforce's impressive revenue growth across segmented categories from 2018 to 2022 underscores its commitment to innovation and diversification. Through strategic acquisitions, product diversification, a customer-centric approach, data analytics, and professional services, Salesforce has solidified its position as a leading CRM provider and continually adapts to meet evolving market demands. This multi-faceted approach has enabled Salesforce to thrive and maintain its leadership in the CRM industry.
Leadership
Marc Benioff is the Chair, CEO, and Co-Founder of Salesforce, a global leader in CRM software. Under his leadership, Salesforce has become a Fortune 150 company with 75,000 employees and is recognized for innovation and equality. Benioff has received numerous accolades for his leadership, including being named "Innovator of the Decade" by Forbes and one of the "World’s 25 Greatest Leaders" by Fortune. He is also known for his philanthropy, creating the 1-1-1 model of philanthropy on day one of Salesforce to improve communities worldwide. Benioff and his wife have donated extensively to healthcare, education, and environmental causes. He is the owner of TIME and author of "Trailblazer: The Power of Business as the Greatest Platform for Change."
Parker Harris, Co-Founder and CTO of Salesforce, oversees the company's technology vision and has been instrumental in driving its technology strategy, including initiatives like Hyperforce and Lightning Experience. He's passionate about cloud computing's role in digital transformation. Before Salesforce, he co-founded Left Coast Software and worked in sales force automation. Harris holds a B.A. in English literature from Middlebury College.
Amy Weaver serves as President and CFO at Salesforce, leading the global finance organization. Before this, she was Chief Legal Officer, overseeing legal and corporate affairs at Salesforce. Her background includes legal roles at Expedia Group Inc., Cravath, Swaine & Moore, and Perkins Coie, along with work in legislative aid and clerking. She serves on several boards and holds a JD from Harvard Law School.
Ariel Kelman is the President and Chief Marketing Officer at Salesforce, responsible for global marketing efforts. He has a background in economics with a Bachelor of Arts from the University of California, Berkeley. Ariel has previously worked at Salesforce and served as CMO at Oracle and AWS before rejoining Salesforce in 2023.
Brian Millham serves as President and COO at Salesforce, overseeing various key functions including sales, customer success, marketing, and more. He has been with Salesforce for over 23 years and has played a significant role in the company's growth and development. Brian's background includes experience at Oracle and Remedy Corporation, and he holds a Bachelor of Arts from the University of California, Berkeley. He also serves on the board of Newsela, an education technology company.
David Schmaier serves as the President and Chief Product Officer at Salesforce, leading the company's global product strategy and vision. He brings over three decades of experience in enterprise software and CRM. David was previously the CEO of Salesforce Industries, and before that, he co-founded and led Vlocity. He holds a B.A. in mechanical engineering from Rensselaer Polytechnic Institute and an MBA from Harvard Business School.
Juan Perez is EVP and CIO at Salesforce, responsible for the global IT team and advising customers on digital transformations. Previously CIO at UPS, he's been recognized for his leadership in technology adoption and received awards like the Forbes CIO Innovation Award. Juan holds degrees in industrial and systems engineering.
Kendall Collins is the Chief Business Officer and Chief of Staff to Marc Benioff at Salesforce. He oversees strategic initiatives and customer relationships for the Office of the Chair and CEO, as well as the global communications team. Kendall has held various executive roles at Salesforce and other companies, driving innovation and marketing strategies. He holds a B.S. in commerce and has extensive experience in the tech industry.
Miguel Milano is the President and Chief Revenue Officer at Salesforce, responsible for global sales and distribution. He has a successful track record in international sales, previously led sales organizations at Salesforce, and held leadership positions at companies like Oracle, McKinsey, and Telefonica. Miguel has engineering degrees and an MBA from MIT's Sloan School of Management.
Nathalie Scardino is Salesforce's interim Chief People Officer, responsible for the global people strategy, employee engagement, and business value. She has over a decade of experience at Salesforce, including roles in recruiting, onboarding, and employee learning. Nathalie has a background in sales and executive search, focusing on technology and digital transformation. She serves on the board of San Francisco Youth Theatre and holds a B.A. from Goldsmiths, University of London. She resides in San Francisco with her family.
Sabastian Niles serves as Salesforce's President and Chief Legal Officer, responsible for global legal and government affairs. With a background as a partner at Wachtell, Lipton, Rosen & Katz, he has extensive experience in corporate transformations, governance, mergers, and sustainability. Sabastian is affiliated with various organizations, including the Aspen Institute, and holds a law degree from Harvard Law School, as well as degrees in finance, economics, and decision and information sciences from the University of Maryland.
Sarah Franklin, President & Chair of the Advisory Board at Salesforce, has over 15 years of experience within the company. She previously served as Chief Marketing Officer and has been dedicated to empowering individuals in technology careers. She played a significant role in launching Trailhead, Salesforce's online learning platform. Sarah has received recognition on Forbes' Most Influential CMO list and holds degrees in chemical engineering and biochemistry from Virginia Polytechnic Institute and State University.
Srini Tallapragada, President and Chief Engineering Officer of Salesforce, oversees a global engineering team responsible for developing and securing the Salesforce Customer 360 and Hyperforce. With over a decade at Salesforce, Srini has driven product and platform innovations. Prior to joining Salesforce in 2012, he held roles at Oracle and SAP. Srini holds a PGDM from XLRI and a BTech in Computer Science from NIT, India. He also serves as an independent director on the board of Avalara.
Suzanne DiBianca, EVP & Chief Impact Officer at Salesforce, has been with the company for over 20 years. She co-founded the Salesforce Foundation and leads Salesforce’s stakeholder capitalism strategy, focusing on ESG efforts, climate action, and the Salesforce Ventures Impact Fund. Suzanne pioneered the 1-1-1 model of corporate philanthropy and is involved in various UN and World Economic Forum councils, as well as serving on multiple advisory boards. She is a graduate of the University of Colorado at Boulder.
Ownership structure
The provided data offers a glimpse into the ownership structure of Salesforce, a prominent company in the Customer Relationship Management (CRM) market. The ownership structure of Salesforce reflects a substantial presence of institutional investors and mutual funds, which is typical for a large, publicly traded company in the technology sector. Salesforce's appeal to institutional investors may be attributed to its position as a leading CRM software provider and its role in the broader technology industry.
Notably, Vanguard and Blackrock, both giants in the investment management industry, hold significant stakes in Salesforce. This suggests a high level of confidence in the company's growth potential and long-term prospects.
The presence of various mutual funds, particularly those tracking major stock indices like the S&P 500, indicates that Salesforce is a component of many diversified investment portfolios. This inclusion underscores Salesforce's prominence within the technology sector and its influence on broader market performance.
Overall, Salesforce's ownership structure reflects a diverse mix of institutional and retail investors, showcasing the company's appeal to a broad range of stakeholders. It's worth noting that while institutions dominate the ownership landscape, individual investors and mutual funds also play pivotal roles in shaping the company's shareholder base.
| Top Institutional Holders
|
|
|
|
| Holder
|
Shares (millions)
|
% of Total
|
Value (million USD)
|
| Vanguard Group Inc
|
83.2
|
8.5%
|
17,041.6
|
| Blackrock Inc.
|
70.6
|
7.3%
|
14,467.3
|
| State Street Corporation
|
45.7
|
4.7%
|
9,351.2
|
| FMR, LLC
|
37.9
|
3.9%
|
7,757.9
|
| Morgan Stanley
|
19.6
|
2.0%
|
4,006.3
|
| Capital World Investors
|
19.2
|
2.0%
|
3,941.4
|
| Geode Capital Management, LLC
|
17.8
|
1.8%
|
3,643.2
|
| Price (T.Rowe) Associates Inc
|
15.2
|
1.6%
|
3,107.3
|
| Fisher Asset Management, LLC
|
13.9
|
1.4%
|
2,845.5
|
| JP Morgan Chase & Company
|
13.6
|
1.4%
|
2,776.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Top Mutual Fund Holders
|
|
|
|
| Holder
|
Shares (millions)
|
% of Total
|
Value (million USD)
|
| Vanguard Total Stock Market Index Fund
|
28.9
|
2.9%
|
5,915.5
|
| Vanguard 500 Index Fund
|
23.1
|
2.3%
|
4,735.1
|
| Fidelity 500 Index Fund
|
11.0
|
1.1%
|
2,245.5
|
| SPDR S&P 500 ETF Trust
|
10.8
|
1.1%
|
2,217.6
|
| iShares Core S&P 500 ETF
|
8.9
|
0.9%
|
1,828.1
|
| Vanguard Growth Index Fund
|
8.0
|
0.8%
|
1,642.4
|
| Vanguard Institutional Index Fund-Institutional Index Fund
|
7.0
|
0.7%
|
1,435.4
|
| Growth Fund Of America Inc
|
6.4
|
0.6%
|
1,318.2
|
| SPDR Dow Jones Industrial Average ETF
|
5.6
|
0.6%
|
1,146.3
|
| Fundamental Investors Inc
|
5.3
|
0.5%
|
1,080.5
|
