Instacart, the grocery delivery app that saw an explosion in demand during the coronavirus pandemic but recently dropped its internal valuation by 38 percent, said it had submitted its confidential file to the public.
The company gave no indication of when it would debut, though executives had previously signaled a float this year might be possible, depending on market conditions.
A spokesman declined to confirm whether Instacart was planning an initial public offering, as is more typical, or a direct listing, in which no new money is raised and only existing shares are put on the market.
In March, Instacart lowered its internal valuation from $39 billion to $24 billion, adding that it was confident in its business but was not “immune to the market turbulence that has hit major tech companies.”
Wednesday’s announcement came as the tech sector has suffered a rout in public markets, with the Nasdaq Composite Index of tech stocks down 28 percent year-to-date.
Instacart’s e-commerce peers in public markets have been hit particularly hard, with market-leading restaurant delivery company DoorDash down 59 per cent year-to-date, while Uber is down 49 per cent. percent and Amazon fell 38 percent.
Investors are turning away from previously attractive high-growth tech companies with strong blue-chip numbers in favor of less volatile sectors like energy, said Jefferies analyst Brent Thill.
Instacart is working with Goldman Sachs and JPMorgan on the listing, according to a person familiar with the arrangements.
The company’s IPO has been long awaited. In January 2021, the company announced that it had hired Goldman Sachs banker Nick Giovanni, who had previously been involved in Airbnb and Twitter IPOs, as its new CFO.
It also added Peloton CEO Barry McCarthy, former CFO of streaming platforms Spotify and Netflix and architect of Spotify’s direct listing in 2018, to its board as an independent director.
In March of that year, the company announced a $39 billion valuation after raising $265 million from its existing investors, fueled by the frenzied adoption of online grocery shopping during the pandemic.
In July, CEO and founder Apoorva Mehta was abruptly replaced by former Facebook executive Fidji Simo. Carolyn Everson, a former Facebook marketing executive, joined in September 2021 with the goal of helping Instacart grow its advertising platform, but she left three months later, citing a “mismatch” in priorities.
More recently, increased competition from the likes of Amazon, which has invested heavily in its grocery-delivery operation through Whole Foods, and quick-delivery apps like Gopuff has put Instacart in a considerably more crowded market.
The online grocery market has shown signs of pulling back slightly as shoppers become more comfortable heading back to stores. According to Brick Meets Click, a grocery consulting group, US online grocery sales in April totaled $8.1 billion, down 3.8 percent from the same month last year. Grocery deliveries accounted for nearly a third of that total amount, with sales falling 6 percent year over year.
Simo has positioned Instacart as a friend to existing grocery store players and has vowed to never own its own inventory, unlike its rivals. The company partners with 70,000 stores and a range of retailers that represents 80 percent of the US grocery industry.
in a blog post on Wednesday, which did not mention the company’s plans to list, Simo wrote: “At Instacart, we believe that the future of supermarkets belongs to those who invented them, not to tech giants or newcomers trying to drive supermarkets out of business.” deal”.
Additional information from Miles Kruppa in San Francisco
Reference-www.ft.com