Online grocery-delivery company Instacart has finally made its highly-anticipated debut on Nasdaq. The company’s shares, priced at $30 each, surged by 40 percent at the opening bell, valuing the company at a staggering $14 billion. Instacart initially filed to go public in May 2022 but faced delays due to market uncertainties caused by inflation and recession fears. However, with the reopening of the U.S. IPO market and boosting investor confidence, Instacart became the first venture-backed IPO in over a year.
Founded in 2012, Instacart experienced exponential growth during the early months of the Covid-19 pandemic, with its business soaring by as much as 600 percent. While the growth has slowed as the effects of the pandemic have subsided, Instacart has managed to maintain a profitable business model. The company achieved profitability for the first time in the second quarter of 2022, reporting a net income of $114 million, a significant increase from $8 million the previous year.
Despite the successful IPO, Instacart’s valuation of $10 billion is considerably lower than its peak valuation of $39 billion in early 2021. Key investors in the IPO include venture capital firm Sequoia and hedge fund D1 Capital Partners, who were the company’s largest shareholders, owning 15 percent and 14 percent of the company respectively before the IPO.
Other notable investors include private equity firms DST Global and General Catalyst, as well as Tiger Global Management and Coatue Management. Instacart’s cofounders, Apoorva Mehta, Brandon Leonardo, and Maxwell Mullen, collectively owned 17 percent of the company before the IPO. However, they took the opportunity to sell some of their shares along with other early employees.
Apoorva Mehta, who previously served as Instacart’s CEO, stepped down in 2021 and appointed Fidji Simo, a former Facebook executive, as his successor. Mehta initially assumed the role of the company’s board chair but has now handed over that position to Simo following the IPO.
Overall, Instacart’s successful Nasdaq debut and impressive valuation highlight the company’s ability to thrive in the competitive online grocery-delivery market and its potential for further growth.
– Observer article by Sissi Cao: “Instacart’s $10 Billion IPO: Winners, Losers and Other Key Players”