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Traction on Demand’s Greg Malpass on the Salesforce offer he couldn’t refuse

Founder talks Salesforce acquisition deal, what comes next for Traction on Demand and his career
Traction on Demand founder and CEO Greg Malpass agreed to sell his company to Salesforce late last month | Rob Kruyt, BIV

Spurning invitations to sell the tech company he’d been building since 2007 had become second nature for Greg Malpass.

“I’ve had 130 inbound inquiries over the last six months from people saying, ‘Hey, would you like to get some chips off the table?’ or ‘Would you love to sell or join us?’” the CEO of Traction on Demand (Traction Sales and Marketing Inc.) told BIV in 2016.

“I haven’t had a boss for so long, I would probably be the biggest pain in the ass for somebody to manage.”

But by late last month, it was clear he might finally be getting a boss after more than 15 years when it was revealed that customer relationship management (CRM) giant Inc. (NYSE:CRM) was acquiring the Burnaby software company. 

“In 2016, we did have a conversation and I just I could never really foresee us looking to sell Traction on Demand,” Malpass told BIV this week.

“And over the course of the last six years, I would say the one thing that's really adjusted is an understanding of what my real accountability is, which is to the people that make the company.”

He was not looking to sell. Instead, Salesforces approached Traction.

Malpass said he then had to pause and consider what the offer would mean for stakeholders and employees: “I just saw an incredible opportunity.”

No selling price has been disclosed yet by the publicly traded company, and the only mention of Traction in Salesforce’s fourth-quarter financials was in the latter’s guidance for 2023, in which the new acquisition is expected to generate US$75 million in revenue. The sale price is expected to be revealed in Salesforce’s next financials in three months.

The Silicon Valley giant isn’t hurting for money and is poised for further growth in the coming year. Its latest earnings revealed revenue grew 25 per cent to hit US$26.5 billion in the fiscal year ending Jan. 31.

The Traction deal was just the latest in a series of strategic acquisitions targeting tech firms with B.C. roots.

In 2020, Salesforce acquired Vancouver’s Mobify Research and Development Inc.

That was soon followed by a cash-and-stock deal worth US$27.7 billion for messaging service Slack Technologies Inc. (NYSE:WORK), which was founded by Vancouverite Stewart Butterfield and maintains sizable offices in the city.

“My guess is that Greg simply got an offer too good to refuse. A year ago he told me he did not want to sell,” said David Raffa, president of Valeo Corporate Finance Ltd., a Vancouver-based firm providing services for mergers and acquisitions (M&A) and initial public offerings.

“In the world of M&A, the best deals for sellers are realized when they either don’t want to or don’t need to sell. Saying no to a prospective buyer is the best leverage you have. Greg built a great company and did not need to sell. My guess is that he hit a home run because of it.”

Traction helps companies implement marketing strategies using Salesforce’s CRM platform, and the new parent company was its largest partner prior to the acquisition. It has about 1,500 workers on the payroll globally, with more than 500 of them based in B.C., making it one of the largest tech employers in the province.

Malpass launched the company after consulting as an independent contractor for San Francisco-area tech companies developing better marketing programs.

The Salesforce tool was one of his go-to resources, and he began helping sales teams with small projects at companies like Adobe, Apple Inc. (Nasdaq:AAPL) and eBay Inc. (Nasdaq:EBAY).

“The mission was never even to grow a business beyond one person,” Malpass said.

But the company now incubates other companies within.

Spinoff Traction Guest Inc., which specializes in visitor management technology for companies, raised US$13 million from investors in 2019 and demand for its platform grew during the pandemic as more offices wanted to track who was entering and exiting their buildings.

Also amid the pandemic: Traction used its expertise to develop an online platform allowing suppliers to better manage and source medical supplies and personal protective equipment for health-care workers.

Malpass, who hails from Nelson, B.C., said he’s confident there will be strong continuity between Traction’s corporate culture and Salesforce’s since they’ve been working with each other for 15 years. 

“The one thing that's exciting to me from a cultural perspective is we're partnering up or joining a company whose values actually are not different in many ways than our own,” he said.

As part of the acquisition, Traction on Demand will become part of Salesforce Professional Services.

Malpass said his No. 1 priority is to ensure the integration between the two companies goes smoothly.

“Once we kind of get that done, then I'll spend a little time thinking about myself. I'm having a lot of great conversations with the leadership team at Salesforce exploring the opportunities,” he said.

“Fifteen years of working alongside these folks as a partner, there's a lot of really exciting things that I'm looking forward to learning more about. And I’m sure … in the coming months, I'll probably have a better sense of that.”

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