Hi Everyone. This is Take Off. We're like a hidden Easter egg in your favorite video game - surprising, delightful, and adding an extra layer of fun to your tech news consumption.

Here's what we're serving up today:

• Add To CART 🛒

• May the (Sales)-Force Be with You ☁️

• Asteroids ☄️

• Trending Tools ⚒️

Add To CART 🛒

Silicon Valley has love in its eyes again as three tech companies filed their S-1 papers (IPO papers) in August.

One of these companies is Instacart, the grocery delivery startup which is about to go public under the ticker (NASDAQ:CART) at a reported valuation of $12 billion.

Instacart’s S-1 papers are 300+ pages long but don't worry, we’ve pulled a lot of all nighters and drank a lot of coffee to read the entire document and we’ve found some interesting things.

Profits: Add To Cart

Here’s a look at their digits for FY-2022.

1. Total Revenue: $2.5 Billion

2. Transaction Revenue: $1.8 Billion

3. Advertising Revenue: $740 Million

4. Net Profit: $428 Million

Wait a second. Is that …. profit that we see? In a gig worker tech company’s statements?

*Double checks statements*

Yes, folks. In a world where burning cash faster than a marshmallow at a campfire is the norm for Gig worker based tech companies, Instacart is the white sheep having been profitable for not 1, not 2 but 5 straight quarters.

Even Uber, the poster child of Silicon Valley turned GAAP profitable just this quarter after 14 years.

Profits in a gig worker based tech company are like John Cena - You can’t see ‘em.

Ads, Ads and Ads

See that not-so-little revenue stream called “Ads” bringing in a massive $740 million and accounting for roughly 30% of the total revenue?

Ads are Instacart’s Pulling a Rabbit out of a Hat magic vertical which not only has ballooned from being a modest $67M business in 2019 to a behemoth raking in $740M in 2022 but also comes with the juicy ad-biz profit margins.

All roads ALWAYS lead back to ads.

Instacart has been very careful with how they’ve rolled out their ads model.

You don't want to display an ad for Cap N Crunch when all the user wants is Cinnamon Toast!

Analysts believe that a lot of Instacart’s profits are due to their ads vertical. Instacart’s core delivery business is also slowing down which might increase the company’s dependence on ads even more.

What is your take on the Instacart IPO? Boom or Bust?

May the (Sales)-Force Be with You ☁️

The era from 2010-2020 can be broadly described as the era of “Growth At All Costs” for the technology world.

Like every other tech company, Salesforce took the growth initiative to heart and started spending big bucks to acquire SaaS companies for multiple billions of dollars.

Here’s a list of their billion club binge:

1. Slack - $27.7 Billion

2. Tableau - $15.7 Billion

3. MuleSoft - $6.5 Billion

During the pandemic, while most of us were baking burning banana bread and not paying attention to Zoom meetings, Salesforce went on a hiring spree, growing their workforce by 30% from 2020-2022.

However, as the economy started turning around post pandemic, the focus shifted from “Growth at all costs” to “Growth if it makes cents …. err, sense”.

And the story was no different for Salesforce. The company came under fire last year for delivering profits and not growth.

The company has been relentlessly working on pleasing the profitability demand of investors which finally paid off in this quarter.

(NASDAQ:CRM) posted a net revenue of $8.6 billion with a net profit of $1.2 billion.

These figures beat the expectations in their own right but the juicy part is that the company achieved a non-GAAP profitability margin of 32%, surpassing the 30% golden threshold that investors were asking for from Salesforce.

How did Salesforce achieve this? Well, by doing a loot of cost cutting.

• The company laid off 10% of its workforce in January ‘23.

• It has shed a lot of office real estate.

• It cut back on employee perks. #NoMoreRetreats

• It increased prices on some its most popular products.

Regardless of the steps taken, the wolves popped the champagne on this result by wooing the stock up shooting it up by more than 6%.

☄️ Asteroids ☄️

X is set to collect users' biometric data, job, and education history starting from September 29. This move aims to enhance security and identification for premium users. 🔑 🔒

OpenAI aims to integrate ChatGPT into classrooms, despite concerns about plagiarism. They suggest using it for language learning, formulating test questions, and teaching critical thinking skills. 🎓🤖

The NYPD plans to use drones to monitor backyard parties during Labor Day weekend in NYC. This move raises privacy concerns and may conflict with surveillance regulations. 🚁👮 

⚒️ Trending Tools ⚒️

🧠 Seona - Intelligent AI-Powered SEO

👨‍🏭 Workvio - Streamline Your Freelance work

⚡️ Trustmary - Lead generation supercharged with social proof

🧑‍💻 Gradient - Fine tune and get completions on private LLMs with a simple web API

📰 Recommended Reading 📰

1/ Learn how to maximize your credit cards and travel in style. Click here to subscribe.

2/ Checkout python code for algorithmic trading and market data analysis joining traders from Goldman Sachs and JPMorgan by clicking here.

3/ The Bay Area Times is the visual daily newsletter on business and tech. Click here to subscribe.

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