Enterprise technology startups continue to innovate in a tough economic environment, driven by demand from companies that fear a lack of technology could cost them market share, venture partners said.
“Markets are made or lost based on how you fail,” said Shane Wall, partner and president of the CXO Network at Fusion Fund, The Wall Street Journal’s CIO Network on Tuesday. Technology leaders now have a critical role to play in ensuring their businesses continue to prioritize technology or risk falling behind in the market.
A particularly important area to continue spending is in cloud investments, Mr. Wall said, adding that we are only at the beginning of the cloud era.
“It’s still 22% of spending in the cloud,” said Alex Kayal, senior vice president and managing partner of Salesforce Ventures on the WSJ’s CIO Network. “So to me, what’s all the hype, there’s still a big opportunity.”
Cyber security and automation are two more areas where companies are now actively investing, Mr. Kayal said.
As CIOs and companies continue to pour dollars into those areas, enterprise technology startups are being leveraged to meet their needs, the venture partners said.
If anything, tighter economic conditions are making entrepreneurs hungrier, Mr. Kayal said. Painkiller companies see that they want to solve the problem, he added.
“We are certainly in an uncertain economy, but we see the innovation,” Mr. Kayal said.
One example of this is UK-based Snyk Ltd., which raised $8.6 billion last year from Salesforce Ventures and others. The company aims to bring security mindset to the developer level, so the code is written with cyber security in mind from the start, said Mr Kayal.
“I think we’ll see the economy soften next year. “We’re going to see a rebound, and we’re going to see winners and losers in that rebound,” Mr. Wall said. At the same time, he said, “the opportunities for growth remain large.”
Write Isabelle Bousquette at Isabelle.Bousquette@wsj.com
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