Amid a period of subdued IPO activity within the tech industry, a major player in the grocery delivery sector, Instacart, has made a significant stride by officially filing for its Initial Public Offering (IPO) becoming one of the foremost venture-backed tech IPOs since December 2021.
In a landscape characterized by cautious market sentiment, Instacart's decision to initiate its IPO signals resilience and confidence in its growth trajectory. Unlike other industry giants such as Amazon Fresh, Walmart Grocery, and Google Express which are subsidiaries of larger corporations, Instacart stands out as one of the first independent grocery delivery companies to go public.
The forthcoming IPO will see Instacart's shares listed on the Nasdaq stock exchange under the distinct symbol "CART," a symbolic step as it steps into the public market. Goldman Sachs is leading the offering for Instacart's IPO.
Notably, the IPO prospectus reveals an impressive financial performance. In 2022, the company successfully transitioned from operating losses to generating profits, with operating income improving from -$72 million in 2021 to a positive $71 million. Revenue also surged to $2.55 billion, marking a 39% increase from the $1.83 billion recorded in 2021.
Instacart has maintained this profitability for five consecutive quarters, as detailed in its filing. In the most recent quarter, Instacart reported a substantial net income of $114 million, solidifying its position as a profitable enterprise. Instacart also has a robust funding portfolio. Crunchbase data shows that the company has secured an impressive $2.9 billion in funding to date.
This is a turnaround performance from when the company was battling with a post-pandemic slump, forcing it to trim its workforce last year. Instacart also saw its valuation drastically reduced from $39 billion to $24 billion as public stocks experienced a decline. By late 2022, the company's valuation reportedly suffered another 50% drop.
However, against all odds, Instacart managed to achieve financial stability and profitability. This impressive feat has undoubtedly caught the attention of investors and industry observers alike. Notably, PepsiCo already committed a $175 million private investment in the company's stock.
Instacart has also received substantial interest from several entities including existing shareholder Sequoia Capital and D1 Capital Partners and others like Norges Bank Investment Management and entities affiliated with TCV and Valiant Capital Management in acquiring shares through the IPO.
This number is expected to grow as the company embarks on its journey into the public market.