Grocery Delivery Giant Instacart Files For IPO
Instacart, an American grocery delivery giant, has filed for an initial public offering (IPO). The company intends to list on…
Instacart, an American grocery delivery giant, has filed for an initial public offering (IPO). The company intends to list on the Nasdaq stock market with the symbol “CART.”
Instacart runs the second-largest grocery delivery service in the US, only beaten by retail giant Walmart. The company makes money by imposing transaction fees on registered grocery stores, delivery fees, grocery price mark-ups, and in-app advertisements.
According to Instacart’s S-1 filing, the company brought in $2.5bn in revenue in 2022, up from $1.7bn in 2021. It posted a $428mn net profit in 2022, making it one of the few profitable tech companies seeking to list on the public markets lately. Yet, most of the 2022 profit came from what Instacart described as a $358mn tax benefit
Instacart reported a $242mn net profit on $1.48bn in revenue in this year’s first half. The company has been profitable for five quarters straight.
- Roughly two-thirds of Instacart’s revenue comes from fees, and one-third comes from ads. In 2022, $1.8bn came from transaction, delivery, and subscription fees, and $740mn came from in-app advertisements. The ad revenue is impressive, given that Instacart only launched ads four years ago.
Other key takeaways from the S-1 filing include:
- Beverage giant PepsiCo has agreed to buy Instacart shares worth $175mn before the company’s public listing.
- Instacart had 3,486 full-time employees at the end of June.
- Sequoia Capital and DJ Capital Partners are the only two venture capital firms with at least 5% ownership of Instacart.
Investment bank Goldman Sachs is the lead underwriter for Instacart’s IPO. Instacart’s finance chief, Nick Giovanni, joined the company from Goldman Sachs in 2021.
Last December, Instacart cut its internal valuation from $39bn to $10bn. The company hasn’t specified how much it’s targeting to raise from the IPO and at what valuation.