On May 11, Instacart announced that it submitted a draft registration statement on Form S-1 with the US Securities and Exchange Commission (SEC). If the registration process is successfully completed, we could soon be looking at an Instacart IPO.
In a brief statement, the company informed stakeholders that it had confidentially submitted the draft and awaited the agency’s review process. The grocery-delivery company, however, did not mention an Instacart IPO date or any financial targets.
Instacart IPO
The retail company based in California has been in the news for various reasons. In March, Instacart valuation dropped from $39 billion to about $24 billion. The company hoped to attract more talent and adapt to post-Covid market conditions with this move.
An Instacart IPO has been one of the most awaited IPOs of the year. However, the online-retailer has never shared a definitive timeline or mentioned how they are preparing for it.
The California-based unicorn had seen sales climb through the roof during the height of the pandemic. Instacart almost became synonymous with grocery delivery across the US. But the company saw its sales fall as the pandemic was brought under control and people found themselves with many more home delivery options. Companies that boomed during the pandemic have experienced slower times. Zoom and Peloton are two such companies that have struggled to adapt to post-Covid times.
In 2019, Instacart’s grocery sales stood at $9 billion, but with the onset of the pandemic in 2020, it grew to over $23 billion, tripling in value. This resulted in the company generating a revenue of almost $1.5 billion.
Over the past decade, Instacart has continued to steadily carve a space for itself in the delivery segment. But the pandemic accelerated its growth like no other. Instacart CEO Fidji Simo has spoken about the startup’s long-term vision that includes much more than grocery delivery.
The company aims to improve its businesses using technology. It recently started offering software infrastructure to retailers to enable ultrafast deliveries. Its software analytics and support centers will help clients deliver goods within 15 minutes. By providing the right kind of e-commerce support, Instacart will help grocers build and manage their stores online. Previously, Simo had stated that Instacart plans to roll out several new software services for its retail partners. He also expressed his worry over rising food prices and how inflation can impact the company.
He mentioned that an Instacart IPO is their ultimate goal. In a conference he stated, “I want to attract investors that understand this long-term vision and understand what we’re trying to do, and so, there’s no rush.”
So far, the company has not mentioned any tentative Instacart IPO release dates.
Competition and Post-Covid Growth
The California-based unicorn has been working on the Instacart IPO for over a year. After the submission of the documents with the SEC, the agency helps set the initial price for the IPO with the help of backers.
Instacart is also facing stiff competition from its rivals like Amazon, DoorDash, and Uber. Companies like Amazon have the technology and know-how to accelerate their business on a large scale. Amazon is working on letting its Prime users shop at its Whole Foods stores without checking out. Money will be debited directly from their Amazon Prime account. Offering such easy solutions to meet customer needs is bound to eat into businesses of other traditional players who do not have access to this kind of funds. Instacart’s valuation in 2016, two years after its inception, stood at $2 billion. As of March 2022, it stands at around $24 billion.
Presently, the company has over 10 million active users and nearly 500,000 workers and continues to grow in the US and Canada.
