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Wish files to go public with 100M monthly actives, $1.75B in 2020 revenue thus far

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This morning Wish, a well-known mobile ecommerce startup, filed to go public. It joins Affirm, Airbnb, and Roblox in filing this week as many well-known and valuable private companies look to debut before the year ends and the holidays start.

Wish’s S-1 (which is filed under its corporate name ContextLogic) is of particular interest given that COVID-19 and the global pandemic have changed consumer behavior around the world in 2020. As going to stores became more risky over time, many shoppers turned to buying more goods from the Internet, bolstering ecommerce players like Shopify, BigCommerce, as well as companies that facilitate online payments, like Square and PayPal.

How has the pandemic impacted Wish? It appears to have accelerated its growth.

Looking back in time, Wish saw its revenue growth slow in 2019, before expanding much more quickly in 2020. From 2017 to 2018, for example, when Wish saw revenues of $1.10 billion and $1.73 billion respectively, it grew 57%. But from 2018 to 2019, its revenue only grew to $1.90 billion, up a far-smaller 10%.

More recently, the situation has improved for the digital retailer, with Wish managing to grow more quickly in the first three months of 2020. In the first nine months of 2019, Wish racked up revenues of $1.33 billion. In the same period of 2020 the company’s top line grew to $1.75 billion, up 32% from the year-ago result.

That’s far better than the 10% growth pace that Wish showed in 2019. Wish’s growth acceleration helps explain why it is going public now: it has a growth story to tell investors.

But the company’s accelerated growth has come at a cost, namely rising losses. During the first three quarters of 2019, Wish posted net losses of just $5 million, before some preferred stock costs pushed its total deficit to $12 million. In the same period of 2020 Wish lost a far steeper $176 million.

Wish’s falling gross margins have not helped. In 2018, Wish had gross margins of 84%. That number fell to 77% in 2019, and then to just 65% in the first three quarters of 2020.

But the ecommerce player did have some more positive details to show, as this table details:

Improving free cash flow in 2020 compared to 2019? Check. Monthly active user growth rising nicely? Yes. Active buyers up compared to the year-ago period? Yep. Looking at the company’s adjusted profitability is not encouraging, but a 6% adjusted EBITDA margin won’t send investors packing for the hills if they buy Wish’s growth story.

COVID-19 was not simply a boost to Wish, its S-1 makes clear. The pandemic shut some supply hubs, slowed supply chains, and lengthened delivery times. But the company also said that it “benefited from greater mobile usage and less competition from physical retail as a result of shelter-in-place mandates” and “benefited from increased user spending due to U.S. government stimulus programs.” Noting that stimulus is fading, Wish warns investors in the document that it “cannot assure you that increased levels of mobile commerce will continue when COVID-19 has subsided or otherwise, or that the U.S. government will offer additional stimulus programs.”

Wish is wealthy, with around $1.1 billion in cash, cash equivalents, and marketable securities. It also has no long-term debts that could cause concern.

Finally, who is going to win in the deal? Most notably Peter Szulczewski, Wish’s founder and CEO. He controls 65.5% of the Company’s Class B shares and around 58% of its total voting power, pre-IPO. Major investors include DST Global, Formation8, Founder Fund, GGV Capital, and Republic Technologies.

Quite a lot of venture hopes and returns are riding on this IPO, then. More soon.

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Teardown of “Dishy McFlatface,” the SpaceX Starlink user terminal

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The outer part of

Enlarge / Ken Keiter gets ready to tear apart the SpaceX Starlink user terminal, “Dishy McFlatface.” (credit: Ken Keiter)

Engineer Ken Keiter recently came into possession of one SpaceX Starlink user terminal, the satellite dish that SpaceX nicknamed “Dishy McFlatface.” But instead of plugging it in and getting Internet access from SpaceX’s low Earth orbit (LEO) satellites, Keiter decided to take Dishy apart to see what’s inside.

The teardown process destroyed portions of the device. “I would love to actually test out the [Starlink] service and clearly I didn’t get a chance to, as this went a little bit further than I was intending,” Keiter said toward the end of the 55-minute teardown video he posted on YouTube last week.

Keiter, who lives in Portland, Oregon, was impressed by the Starlink team’s work. “It’s rare to see something of this complexity in a consumer product,” he said in reference to the device’s printed circuit board (PCB), which he measured at 19.75″ by 21.5″.

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Salesforce applies AI to workflow with Einstein Automate

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While Salesforce made a big splash yesterday with the announcement that it’s buying Slack for $27.7 billion, it’s not the only thing going on for the CRM giant this week. In fact Dreamforce, the company’s customer extravaganza is also on the docket. While it is virtual this year, there are still product announcements aplenty and today the company announced Einstein Automate, a new AI-fueled set of workflow solutions.

Sarah Franklin, EVP & GM of Platform, Trailhead and AppExchange at Salesforce says that she is seeing companies facing a digital imperative to automate processes as things move ever more quickly online, being driven there even faster by the pandemic. “With Einstein Automate, everyone can change the speed of work and be more productive through intelligent workflow automation,” she said in a statement.

Brent Leary, principal analyst at CRM Essentials says that combined these tools are designed to help customers get to work more quickly. “It’s not only about identifying the insight, it’s about making it easier to leverage it at the the right time. And this should make it easier for users to do it without spending more time and effort,” Leary told TechCrunch.

Einstein is the commercial name given to Salesforce’s artificial intelligence platform that touches every aspect of the company’s product line, bringing automation to many tasks and making it easier to find the most valuable information on customers, which is often buried in an avalanche of data.

Einstein Automate encompasses several products designed to improve workflows inside organizations. For starters, the company has created Flow Orchestrator, a tool that uses a low-code, drag and drop approach for building workflows, but it doesn’t stop there. It also relies on AI to provide help suggest logical next steps to speed up workflow creation.

Salesforce is also bringing Mulesoft, the integration company it bought for $6.5 billion in 2018 into the mix. Instead of processes like a mortgage approval workflow, the Mulesoft piece lets IT build complex integrations between applications across the enterprise, and the Salesforce family of products more easily.

To make it easier to build these workflows, Salesforce is announcing the Einstein Automate collection page available in AppExchange, the company’s application marketplace. The collection includes over 700 pre-built connectors so customers can grab and go as they build these workflows, and finally it’s updating the OmniStudio, their platform for generating customer experiences. As Salesforce describes it, “Included in OmniStudio is a suite of resources and no-code tools, including pre-built guided experiences, templates and more, allowing users to deploy digital-first experiences like licensing and permit applications quickly and with ease. ”

Per usual with Salesforce Dreamforce announcements, the Flow Orchestrator being announced today won’t be available in beta until next summer. The Mulesoft component will be available in early 2021, but the OmniStudio updates and the Einstein connections collection are available today.

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Virta Health’s behavioral diabetes treatment service is now worth over $1 billion

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A new $65 million investment led by the growth capital and public investment arm of Sequoia Capital will give Virta Health, a developer of a behavioral-focused diabetes treatment, a valuation of over $1 billion.

Virta’s approach, which uses a combination of approaches to change diet and exercise to reverse the presence of type 2 diabetes and other chronic metabolic conditions, has shown clinical success and attracted 100 health care payers to endorse the company’s treatments.

“We partnered with Virta for their ability to deliver unmatched health improvement and cost savings—two clear differentiators from other offerings on the market,” said William Ashmore, CEO of the State Employees’ Insurance Board of Alabama, in a statement. “Especially amid the COVID-19 pandemic, it’s vital that we provide our members the life-changing results Virta is known for delivering, through expert, virtual care delivered right to their home.”

The company said it would use the funding to expand sales and marketing efforts for its services as well as expand its research and development into other non-pharmaceutical therapies for metabolic conditions.

The financing came from Sequoia Capital Global Equities and Caffeinated Capital and brings the company’s total funding to over $230 million and gives it a $1.1 billion valuation, according to a statement.

Alongside Sequoia Capital Global Equities, Caffeinated Capital participated in the round, which brings total funding to more than $230 million and values Virta Health at over $1.1 billion.

Diabetes has long been an attractive condition for startups and has been the first target that companies focused on behavior changes to influence metabolic conditions aim to address. The reason why there are so many diabetes-focused businesses is because of the prevalence of the disease in the U.S. Almost half of adults in the U.S. suffer from obesity, pre-diabetes, or type 2 diabetes and the disease kills thirty people every hour. Diabetes also doubles the risk of death from COVID-19 infections.

Beyond the risks, the costs of treatment are skyrocketing. According to data from the American Diabetes Association released in March 2018, the total costs of treating diagnosed diabetes have risen to $327 billion in 2017 from $245 billion in 2012, when the cost was last examined.

“Given the scope of the metabolic crisis in the U.S. and globally, it cannot be understated how game-changing Virta’s results and care delivery are,” said Patrick Fu, managing partner at Sequoia Capital Global Equities, in a statement. “Virta’s technology-driven, non-pharmaceutical approach has fundamentally changed how diabetes is cared for, and our collective belief in what is possible for population health improvement. This is the future of chronic disease care.”

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