Enterprise Weekly #547: SaaS Selloff, Importance of Proving ROI, and More
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The topic du jour of this week has been the SaaS selloff. Looking at the data:
A Goldman Sachs basket of software stocks lost 15% of value in 7 days, dropping back to its lowest levels since last April
In the last 5 days: Salesforce stock is down 9.6%, Snowflake stock is down 18.25%, Datadog stock is down 12.75%
$300B of software market cap was wiped out
Shifts of this magnitude don’t happen in a vacuum. The freefall coincided with a seemingly innocuous release from Anthropic on Friday of 11 open source plugins that extend Claude Cowork in a way that makes it more useful for non-technical users. The plugins range from sales and marketing to product management and data, with a number of connectors. As Anthropic put it:
“Each plugin bundles the skills, connectors, slash commands, and sub-agents for a specific job function. Out of the box, they give Claude a strong starting point for helping anyone in that role. The real power comes when you customize them for your company — your tools, your terminology, your processes — so Claude works like it was built for your team.”
What should one make of this market movement? A few main takeaways:
Traditional enterprise software won’t go away overnight. All the talk about teams rebuilding their CRM and ERP from scratch is likely going to be short-lived; when building the product becomes easy, maintaining it and accounting for all the edge cases (in a mission critical system) becomes the new constraint.
That being said though, the market is pricing in a) the advent of AI-native competition to these incumbents, and b) the shifting of IT budgets to AI. If AI budgets within teams are growing 100% YoY but overall IT budgets are growing 8%, what gives? Traditional application companies price off seats, and that is vulnerable in the AI era (especially when teams get more done with less).
For founders, pricing and value discovery are more important than ever. In a world where IT budgets are shifting toward AI and buyers are questioning the value of legacy tooling, justifying spend will need to be rooted in real ROI. The companies that thrive will be the ones that can clearly articulate the delta between what they deliver and what an AI agent can do out of the box.
Lastly, lots of exciting news from the Work-Bench portfolio🎉
Congratulations to our portfolio company Flock AI on their $6M seed round led by Work-Bench! Flock is building the AI-native content engine for retail, replacing traditional photo shoots with brand-accurate imagery and video at scale, while fitting directly into how creative and merchandising teams already work. The company is led by CEO Vita Mallela, who ran multi-billion-dollar merchandising and creative ops at Bloomingdale’s and Jet.com/Walmart, and CTO Malavika Reddy, a decade-plus AI and computer vision veteran from Microsoft. Read more about them on our blog. The team is hiring for three founding roles: two Enterprise AEs to land flagship accounts and an AI Customer Success Strategist to lead how brands adopt AI powered visual content from day one. Know someone great? Email vita@flockshop.ai or check out the Flock AI LinkedIn job board.
Congratulations to our portfolio company Goodfire on their $150M Series B led by B Capital! We invested in Goodfire at both the Seed and Series A and it’s been great to see how far they’ve come. Goodfire is a research lab using interpretability to understand, learn from, and design AI systems. Their mission is to build the next era of safe and powerful AI, not by scaling alone, but by understanding the intelligence we’re building. We’re excited for what’s next! Read more about them on our blog.
♠️ NYC Tech Poker Night with Work-Bench and Courier Health (Feb 24th): Work-Bench and Courier Health are hosting a fun, poker night for NYC founders and operators. This will be an intimate 30-person event. Sign up to play here.
📚 Read more news:
WSJ: The Week Anthropic Tanked the Market and Pulled Ahead of Its Rivals
TechCrunch: Amazon and Google are winning the AI capex race — but what’s the prize?
VentureBeat: How recruitment fraud turned cloud IAM into a $2 billion attack surface
CNBC: Goldman Sachs is tapping Anthropic’s AI model to automate accounting, compliance roles
Reuters: Big Tech’s $600 billion spending plans exacerbate investors’ AI headache
🧵 Read more threads:
Jon Lehr: What Part of the Cycle Are We In?
Danny Chesley: Growing Bifurcation in VC
Proby Shandilya: Workday’s Early Customers
Mitchell Hashimoto: My AI Adoption Journey
Erik Yao: The Future of Coding in the AI Era
Company: Goodfire
Role: GTM Lead
Technology: AI Interpretability
Funding: $209M from Work-Bench, Lightspeed, Menlo Ventures, B Capital, and others
🌟 Company of the Week 🌟
Arbor raises $6.3M led by 645 Ventures
Collaboration & Productivity - Pre-Seed & Seed - New York, NY
Founders: Veronica Ma, Kelly Zhou
Berget AI raises $2.5M led by Luminar Ventures
Data / AI / Machine Learning • Preseed • Stockholm, Sweden
Enclaive raises $4.8M led by Join Capital and Amadeus APEX Technology Fund
Risk / Security • Seed • Berlin, Germany
Feltsense raises $5.1M led by Draper Associates
Data / AI / Machine Learning • Seed • San Francisco, CA
Flock raised $6M led by Work-Bench
Data / AI / Machine Learning • Seed • New York, NY
Airrived raises $6.1M led by Cannage Capital
Data / AI / Machine Learning • Seed • Dublin, CA
Arbor raises $6.3M led by 645 Ventures
Collaboration / Productivity • Pre-Seed & Seed • New York, NY
Refute raises $6.8M led by Amadeus Capital Partners
Risk / Security • Seed • London, UK
Fibr AI raises $7.5M led by Accel
Infrastructure / Dev Tools • Seed • San Francisco, CA
Veritus raises $10.1M led by Crosslink
Data / AI / Machine Learning • Seed • San Francisco, CA
Nullify raises $12.5M led by SYN Ventures
Risk / Security • Seed • San Francisco, CA
Bits raised $14.2M led by Alstin Capital
Future of Work • Series A • Stockholm, Sweden
Nixtla raises $16M led by Energize Capital
Data / AI / Machine Learning • Series A • San Francisco, CA
Day AI raises $20M led by Sequoia Capital
Collaboration / Productivity • Series A • Boston, MA
Kasada raises $20M led by EQT
Risk / Security • Venture • New York, NY
Pasito raises $21M led by Insight Partners
HR Tech • Series A • New York, NY
Daytona raises $24M led by Firstmark
Infrastructure / Dev Tools • Series A • New York, NY
Veremark raises $26M led by Gresham House Ventures
HR Tech • Series B • London, UK
Sixfold raises $30M led by Brewer Lane
Future of Work • Series B • New York, NY
RADICL raises $31M led by Paladin Capital Group
Risk / Security • Series A • Boulder, CO
Orion Security raises $32M led by Norwest
Risk / Security • Series A • Tel Aviv, Israel
VillageSQL raises $35M led by FirstMark, GV, and Spark Capital
Infrastructure / Dev Tools • Seed & Series A • Redwood City, CA
Duna raises $35.3M led by CapitalG
Risk / Security • Series A • Amsterdam, The Netherlands
Rapidfort raises $42M led by Blue Cloud Ventures and Forgepoint Capital
Risk / Security • Series A • San Francisco, CA
Poetiq raises $45.8M led by FYRFLY Venture Partners and Surface Ventures
Data / AI / Machine Learning • Seed • Mountain View, CA
Adaption Labs raises $50M led by Emergence Capital Partners
Data / AI / Machine Learning • Seed • San Francisco, CA
Gruve raises $50M led by Xora Innovation
Infrastructure / Dev Tools • Series A • Redwood City, CA
GenLogs raises $60M led by Battery Ventures
Future of Work • Series B • Arlington, VA
Lawhive raises $60M led by Mitch Rales
Future of Work • Series B • London, UK
Fieldguide raises $75M led by Goldman Sachs Alternatives
Future of Work • Series C • San Francisco, CA
SynthBee raises $80M led by Crosspoint Capital Partners
Collaboration / Productivity • Venture • Fort Lauderdale, FL
Shield Technology Partners raises $100M led by Thrive Holdings
Future of Work • Venture • Tampa, FL
Resolve AI raises $125M led by Lightspeed Venture Partners
Risk / Security • Series A • San Francisco, CA
Goodfire raises $150M led by B Capital
Data / AI / Machine Learning • Series B • San Francisco, CA
Fundamental raises $255M led by Oak HC/FT, Battery Ventures, and others
Data / AI / Machine Learning • Series A • San Francisco, CA
ElevenLabs raises $500M led by Sequoia Capital
Future of Work • Series D • London, UK
Cerebras Systems raises $1B led by Tiger Global
Data / AI / Machine Learning • Series H • Sunnyvale, CA
Francisco Partners acquires Jamf for ~$2.2B
Risk / Security • Acquisition • Minneapolis, MN
Marvell Technology acquires Celestial AI for $3.3B
Infrastructure / Dev Tools • Acquisition • Santa Clara, CA
Dash0 acquires Lumigo for an Undisclosed Amount
Infrastructure / Dev Tools • Acquisition • Tel Aviv, Israel