Instacart, the popular grocery delivery company, has filed for an IPO with the aim of revolutionizing the omni-channel grocery shopping experience. This move comes after a challenging period for gig economy companies on the public market, as elusive profits have dampened investor enthusiasm.
Instacart plans to list its shares on the Nasdaq under the ticker symbol CART. In its recently released prospectus, the company revealed that its revenue for the latest quarter increased by 15% to $716 million, with a net income of $114 million. Highlighting its commitment to innovation, Instacart also announced the launch of Ask Instacart, a generative artificial intelligence tool designed to answer customers’ grocery shopping questions.
CEO Fidji Simo expressed her vision for the future of grocery shopping, stating that it shouldn’t be limited to choosing between online and in-store options. Instead, she envisions a seamless omni-channel experience that seamlessly integrates the best aspects of online and physical shopping.
Founded in 2012, Instacart has rapidly grown its network of shoppers and drivers, covering over 5,500 cities and working with more than 40,000 grocers and stores. The company experienced a surge in demand during the COVID-19 pandemic as people sought to avoid crowded public places. However, profitability has been a challenge for the gig economy giant, primarily due to the high costs associated with employing contractors.
Instacart’s valuation took a hit during the market downturn of 2021, with the company slashing its value from $39 billion to $24 billion. By late 2022, reports suggest that the valuation had dropped another 50%. Competitors such as Amazon, Target, Walmart, and DoorDash pose significant challenges to Instacart’s market position.
Fidji Simo took on the role of Instacart’s CEO in August 2021 and assumed the position of chair of the board in July 2022. Previously, she served as the head of Facebook’s app at Meta and reported directly to CEO Mark Zuckerberg. As for Instacart’s founder and executive chairman, Apoorva Mehta, he plans to transition off the board after the company’s IPO, according to a statement released in 2022.
Instacart’s IPO marks a significant milestone as it aims to revitalize the tech IPO space, which has seen limited activity since late 2021. HashiCorp and Samsara, both software vendors, were among the few venture-backed tech companies to go public in December of that year. However, the sector has been relatively dormant since then. Notably, Arm, a chip designer owned by Japan’s SoftBank, recently filed for a Nasdaq listing.
When Instacart goes public, it will be one of the first independent grocery delivery companies to do so, setting it apart from major corporations with their own delivery services like Amazon Fresh, Walmart Grocery, and Google Express. This distinction positions Instacart as a key player in the evolving grocery delivery landscape.
In summary, Instacart’s decision to file for an IPO showcases its confidence in disrupting the traditional grocery shopping experience. With its robust network and dedication to innovation, the company is poised to make a mark in the increasingly competitive market. Investors will be keeping a keen eye on its public debut to assess the viability of the gig economy model in the long term.
