Salesforce spending austerity has ended
Salesforce announced today that it will spend around $8 billion to buy Informatica
Welcome to Cautious Optimism, a newsletter on tech, business, and power.
Happy Tuesday! CO was off yesterday as both its writer and editor were busy caring for tiny humans with big demands. In lieu of our regular economic calendar, this week we’ll get earnings data from Box and Okta (Tuesday), Salesforce, Nvidia, C3.AI, Nutanix, SentinelOne, PureStorage and Veeva (Wednesday), and Marvell, Dell, Elastic, ZScaler (Thursday).
Elsewhere in news-land, American stablecoin giant Circle — the company behind USDC; our first look at its IPO filing here — is looking at a price range of $24 to $26 per share in its upcoming IPO. Per RenCap, that puts its fully diluted worth at $6.2B at the midpoint of its range. You can read the latest S-1/A here, and if you do pay especial attention to page 91, which details the rate at which Circle is able to monetize its stablecoin reserves. And then recall the GENIUS Act — the current leading stablecoin bill over in Congress — would ban stables from remitting a portion of their yield to holders of stablecoins. That’s quite a boon to Circle, isn’t it? — Alex
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Round of the Day: TechCrunch’s Anna Heim covered SpAItial’s unveiling and large $13 million Seed round. The European startup is building what it calls “Spatial Foundation Models,” or AI models “designed to generate and reason about the appearance and physics of real and imagined environments.” You can see a demo of sorts here, but it’s not hard to see SFM applications from design to video games. Curious to see what the company cooks up and releases in the coming quarter.
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The Browser Company’s web browser, to be replaced by work on its AI-first Dia browser. A reminder that we all need to give Dia — and Cora, frankly — a spin.
Salesforce goes shopping (again)
Here’s a fun run of historical headlines:
Bloomberg (September 2022): Salesforce Will Continue to Make Acquisitions, CEO Benioff Says
Fortune (March 2023): Salesforce has disbanded the board’s mergers and acquisitions committee, an abrupt sign that Marc Benioff’s string of multibillion-dollar deals is finished
*Record Scratch*
Salesforce (September 2024): Salesforce Signs Definitive Agreement to Acquire Own Company
Salesforce (September 2024): Salesforce Signs Definitive Agreement to Acquire Zoomin
Salesforce (May 2025): Salesforce Signs Definitive Agreement to Acquire Convergence.ai
Adding to the list, Salesforce announced today that it will spend around $8 billion to buy Informatica, adding to its ever-expanding roster of purchased assets that help the CRM giant — historically — grow around the 10% mark.
What’s somewhat funny is how short-lived the Salesforce austerity period lasted. Fortune noted back in 2023 that the company’s “free-spending approach has run into opposition from a coterie of activist investors, including Elliott Management and Starboard Value, which have pressured Salesforce to cut costs.”
Founders: You can sell your startup to Salesforce. (Ahem, Crunchbase. Yes, you too.)
Salesforce stock traded between $180 and $190 per share back in March of 2023, and it’s worth $273 today.
So, what does Informatica do and why does Salesforce want to buy it? It’s simplest to think of Informatica as a data organizer, observer, and governor. By that we mean that the company’s core technology — its very Salesforce-y “Intelligent Data Management Cloud” — helps customers find and organize their data, send it to the right places, ensure that it’s not bullshit, and handle both governance and privacy.
As Salesforce itself is in the business of organizing customer data, you can see the two pieces fitting together under an AI-umbrella; Informatica stresses its CLAIRE service, while Benioff and company will talk your ear off about agents and AI and the like. I reckon that Salesforce understands that its core CRM market’s TAM is only growing so quickly, and thus if AI is the future it had better have a more data-holistic approach to handling customer information, and generating work atop it (the much vaunted AI-agent revolution we’ve been promised.)
Strategy aside, is the purchase expensive? Salesforce reports earnings this week, but we have Informatica’s Q1 data from earlier in the month. Here’s how it performed: