Grocery delivery app Instacart submits confidential filing to go public

Instacart, the grocery delivery app that has seen an explosion in demand during the coronavirus pandemic but recently cut its internal rating by 38 percent, announced that it had filed its confidential filing to go public.

The company gave no official details on the date of its debut, although executives had previously hinted that depending on market conditions, it could be possible to go public later this year.

A spokesman declined to confirm whether Instacart was planning an IPO, as is more common, or a direct listing, where no new money will be raised and only existing shares will be listed.

In March, Instacart said it had cut its internal valuation to $24 billion from $39 billion and said it was confident in its business but not “immune from the market turmoil that has hit leading tech companies.”

Wednesday’s announcement came as the technology sector takes a beating in public markets, with the tech-stock-heavy Nasdaq Composite Index down 28 percent year-to-date.

Instacart’s e-commerce competitors in the public markets have particularly suffered, with market-leading restaurant delivery service DoorDash down 59 percent year-to-date, Uber down 49 percent and Amazon down 38 percent.

Investors are turning away from previously attractive, high-growth tech companies with strong sales in favor of less volatile sectors like energy, noted Jefferies analyst Brent Thill.

According to a person familiar with the arrangements, Instacart is working with Goldman Sachs and JPMorgan on the listing.

The company’s IPO was long awaited. In January 2021, the company announced it had hired Goldman Sachs banker Nick Giovanni, previously involved in Airbnb and Twitter IPOs, as its new chief financial officer.

Additionally, Peloton CEO Barry McCarthy, a former chief financial officer of streaming platforms Spotify and Netflix and the architect of Spotify’s direct listing in 2018, has been added to its board as an independent director.

In March of this year, the company announced a valuation of $39 billion after raising $265 million from its existing investors, spurred by the frantic adoption of online grocery shopping during the pandemic.

In July, Apoorva Mehta became managing director and founder replaced abruptly with former Facebook executive Fidji Simo. Carolyn Everson, a former Facebook marketing executive, was brought on board in September 2021 to help Instacart grow its advertising platform – but left the company three months later, citing a “misalignment” of priorities.

More recently, increased competition from companies like Amazon, which has invested heavily in its grocery delivery operations through Whole Foods and other locations, and fast-delivery apps like Gopuff has pushed Instacart into a much more crowded market.

The online grocery market has shown signs of retreating slightly as shoppers become more comfortable returning to stores. According to Brick Meets Click, a grocery advisory group, U.S. online grocery sales totaled $8.1 billion in April, down 3.8 percent from the same month last year. Grocery deliveries accounted for nearly a third of that total, with sales down 6 percent year-on-year.

Simo has positioned Instacart as a friend of existing grocers and has committed to never carrying its own inventory, unlike its competitors. The company currently works with 70,000 stores and works with retailers representing 80 percent of the US grocery industry.

in one blog entry On Wednesday, who didn’t mention the company’s plans to list, Simo wrote, “At Instacart, we believe the future of food belongs to those who invented it – not tech goliaths or newcomers trying to put grocers out of business.” push.”

Additional reporting from Miles Kruppa in San Francisco

Grocery delivery app Instacart submits confidential filing to go public Source link Grocery delivery app Instacart submits confidential filing to go public

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