Grocery delivery startup Instacart files to go public; slashed its valuation from $39 billion to $24 billion
Nickie Louise
Posted On August 28, 2023
In a move that marks the first major IPO in the venture-backed tech sphere since December 2021, grocery delivery startup Instacart filed its official paperwork with the Securities and Exchange Commission (SEC) on Friday, signaling its intent to enter the public market. The company’s stock will be listed on the Nasdaq under a new ticker symbol “CART.”
According to the filing, the company has now been profitable for five straight quarters with a net income totaling $114 million. “Gross profit grew from $1,226 million in 2021 to $1,831 million in 2022, an increase of 49%, and from $769 million for the six months ended June 30, 2022, to $1,109 million for the six months ended June 30, 2023, an increase of 44%,” the company added.
Instacart also reaffirmed its commitment to enhancing its platform through the integration of artificial intelligence and machine learning functionalities. The company foresees leveraging these AIML solutions to propel its future business growth. In line with this strategy, Instacart unveiled “Ask Instacart” in May, a search tool designed to respond to customers’ inquiries about their grocery shopping, tapping into the burgeoning realm of generative AI.
“We believe the future of grocery won’t be about choosing between shopping online and in-store,” CEO Fidji Simo wrote in the prospectus. “Most of us are going to do both. So we want to create a truly omni-channel experience that brings the best of the online shopping experience to physical stores, and vice versa.”
Meanwhile, Instacart reduced its valuation from $39 billion to $24 billion in March 2022 due to declining public stock performance. By the end of 2022, reports indicated a further 50% drop in its valuation. Noteworthy competitors for Instacart include Amazon, Target, Walmart, and DoorDash.
Instacart aims to break into the largely tech IPO market which has remained dormant since late 2021. In December of that year, HashiCorp, a software vendor, and Samsara, specializing in cloud tech for industrial firms, went public. However, there’s been a dearth of significant tech IPOs backed by venture capital. Notably, Arm, a chip designer under Japan’s SoftBank, recently initiated a Nasdaq listing application.
Founded in 2012 by Apoorva Mehta (a former Amazon employee), Brandon Leonardo, and Max Mullen, the San Francisco, California-based Instacart is a grocery startup that offers same-day grocery delivery service. Instacart has quickly scaled to over 220 markets and partnered with retailers across North America, including popular national chains (Albertsons, Kroger, Costco, Loblaw) as well as local, regional grocers (Publix, Wegmans, Schnucks, H-E-B).
Instacart is available to more than 85% of U.S. households and more than 70% of Canadian households with delivery and pickup services across more than 5,500 cities in North America. The company expects to deploy the new capital in a number of ways, including product development focused on introducing new features and tools to enhance the customer experience, continued investment in Instacart Enterprise to support retailers’ end-to-end eCommerce needs, and further investment in Instacart Ads to help connect Consumer Packaged Goods (CPG) brands of all sizes to customers shopping online from their favorite local retailers.
