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Salesforce.com secures $35 million in funding

The start-up founded by former Oracle executive Marc Benioff receives $35 million in its latest round of funding from investors.

Salesforce.com today received $35 million in its latest round of funding from investors such as CS First Boston and WR Hambrecht.

Founded by former Oracle executive Marc Benioff, Salesforce.com, which launched in February, said it will use this second round of financing to expand its product offerings and grow its business in the United States and overseas.

The San Francisco-based start-up's online service gives salespeople tools to track leads and customer account information, build reports, and compare their performance to the rest of the sales force. The company boasts several industry leaders on its investor list, including Oracle chief executive Larry Ellison, CNET (publisher of News.com) chairman and founder Halsey Minor, WR Hambrecht chairman William Hambrecht, and KLA Tencor founder Bob Anderson.

The news comes amid an increasingly competitive market dominated by customer relationship management (CRM) software leader Siebel Systems, which produces applications that help automate companies' sales, marketing and call center needs. Leading research firms predict the lucrative CRM market will reach $16.8 billion by 2003.

A number of business management software providers have jumped into the fray by either partnering with other niche CRM software makers such as Nortel Networks-Clarify application unit, or developing a software product line of their own.

SAP last week announced it will partner with Clarify to resell its call center application. Oracle last month unveiled its own Web-enabled suite of CRM software, and PeopleSoft is launching a suite of sales and customer service software, drawing technology from its recent acquisition of CRM software developer Vantive and J.D. Edwards.

Siebel also recently launched its own online CRM software service, which rivals Salesforce.com. Last December, Siebel spun off Sales.com equipped with $27 million in funding from Siebel, Sequoia Capital and U.S. Ventures. Sales.com targets sales representatives by offering Web-based tools to manage contact and account management information licensed from Siebel.

Separately, Salesforce.com today named new investors to add to its marquee roster, including investment banking firms CS First Boston and WR Hambrecht, along with Gateway chief executive Ted Waitt and VeriSign chief executive Stratton Sclavos.