Instacart reveals revenue surge in IPO filing

Grocery delivery app Instacart on Friday revealed a 31% jump in revenue for the first half of the year as it made public its filing for a stock market flotation in New York, setting the stage for one of the most anticipated listings in recent years.

The development comes 15 months after Instacart submitted its IPO paperwork confidentially, a move that is typically a precursor to an imminent listing.

The San Francisco-based company had earlier aimed to list in the fourth quarter of last year, but deferred its plans as a sell-off in technology stocks and the Federal Reserve’s relentless rate hikes led to a rout in equities.

Offering a detailed look into its finances for the first time, Instacart said its revenue had surged 31% to $1.48 billion in the six months ended June 30.

The fact that the company is churning a profit could also help it find favor among picky IPO investors, who have since last year have been preferring profitable firms over ambitious but loss-making startups.

The company’s net income was $242 million during the six-month period, compared to a $74 million loss a year earlier.

Founded in 2012, Instacart is led by Fidji Simo, who was previously head of the Facebook app. The filing also said her 2022 annual compensation was $1.5 million.

Initial public offerings by Instacart and SoftBank Group-backed chip designer Arm are expected to revitalize the US IPO market, which has already seen some green shoots this year after a drought in 2022, on bets that the Fed could guide the economy to a “soft landing.”

Excluding special purpose acquisition companies (SPACs), $10.3 billion has been raised via 77 IPOs so far this year, nearly double the amount in the same period in 2022, according to data from Dealogic.

“I think we’re going to see more companies kick off their (IPO) process in 2024, which is when a healthy IPO market will return,” said Mike Bellin, IPO services leader at PricewaterhouseCoopers US.

Goldman Sachs and JPMorgan are the lead underwriters for the offering, Instacart said, adding that its shares would be listed on the Nasdaq under the symbol “CART.”

Long road to IPO

Instacart’s tortuous path to a Nasdaq listing saw the company reportedly cut its internal valuation to as low as $10 billion in December 2022, 74% lesser than the $39 billion price tag it fetched in its last funding round more than two years ago.

The company in April hiked its valuation by 18%, according to a report.

Instacart had considered a direct listing, sources told Reuters earlier. Unlike in an IPO, no shares are sold in advance in a direct listing and investors can sell their shares directly to the public.

In March 2021, the company brought on Snowflake CEO Frank Slootman, a software industry veteran behind some big IPOs, on its board.

The company filed for the IPO as “Maplebear,” the name under which it was incorporated.