Instacart, a grocery delivery service, files for its long-awaited IPO

Instacart, a firm that delivers groceries, is going public.

The San Francisco-based business submitted documents to the US on Friday. Commission for Securities and Exchange.

In the upcoming weeks, the IPO is anticipated to take place. The number of shares and the price have not yet been decided, according to Instacart, which said it intends to trade on the NASDAQ Stock Exchange under the stock symbol „CART”. According to Instacart, PepsiCo has agreed to purchase convertible preferred stock worth $175 million in a private placement.

Online grocery shopping has enormous potential, according to Instacart CEO Fidji Simo in a letter to investors.

Only 12% of sales in the $1.1 trillion U.S. grocery business are made online. Over time, she anticipates that to at least double. Simo stated, „We have proven our capacity to assist our retail clients in driving great growth and maintaining competitiveness in a complicated and increasingly digital industry.”

Für Instacart, which was established in 2012, the IPO has been a long-awaited step. In May 2022, the company secretly filed for an IPO, but postponed those plans last October, as recession fears roiled the markets. According to Renaissance Capital, the number of IPOs in the United States last year was just 71, the fewest since 2009.

But this year has seen a rise in IPO activity due to a recovering market. According to Renaissance Capital, 52 IPOs were held in the first half of this year. Instacart might raise up to $1 billion through its sale, according to Renaissance.

More than 80,000 retailers, or 85% of American grocery stores, provide delivery through Instacart. According to the business, Instacart has 7.7 million active users who spend $317 monthly on the service. Instacart reported that their Orders increased by 18% to 262.6 million between 2021 and 2022 in its IPO filing.

However, this year, the speed of order has slowed. Instacart’s orders increased by fewer than 1% to 132.9 million in the six months that ended on June 30. Numerous rivals are putting pressure on Instacart, particularly as customers look for methods to save money during a period of rapid food price increases.

According to market research company YipitData, Instacart owned 22% of online grocery sales in the United States in July. Comparatively, 27% in the same month last year.

In the food industry, third-party apps like DoorDash and Uber Eats are expanding swiftly. DoorDash, which started offering grocery delivery in 2020, established a record for total orders during the months of April and Juni, as supermarket and convenience store deliveries picked up speed.

Nevertheless, Instacart’s sales increased 31% to $1.47 million in the first half of this year. This is primarily a result of increases in the advertising money Instacart receives from merchants and food producers.

Simo, the CEO of Instacart seit 2021 and a former Facebook executive, has made expanding advertising a top focus. Simo, a French native and member of a fishing family, has said that advertising contributes to lower shipping costs for customers.