It’s not a done deal, but San Francisco-based grocery delivery platform Instacart is testing the waters for a potential IPO.
The company said late Wednesday that it had confidentially filed to go public, despite a slashed valuation in March from $40 billion to $24 billion.
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Overall, tech stocks have struggled this year with the Nasdaq dropping nearly 30 percent from last November’s high. Instacart’s move is a fairly bold one as IPOs in general have dropped considerably in 2022 from the run in 2021.
In January, we reported that concerns over inflation have spurred a massive selloff across the board. As such, stocks have taken a nosedive and the IPO window effectively closed. Matt Kennedy, a senior strategist at IPO research firm Renaissance Capital, said at the time that the average 2021 return from the offer price for companies that went public was around negative 25 percent.
Bold or bad move?
Instacart is one of several tech companies to benefit from the COVID pandemic-induced lockdown of 2020. As the country’s grocery shoppers were forced online to buy goods, the company reaped revenue rewards.
By the same token, the company has sputtered as communities reopened, vaccines became available and shoppers resumed buying groceries in person.
For its part, Instacart is now pushing a new software suite, announced this week, that it will sell to supermarkets. Also on the agenda is a fulfillment service called Carrot Warehouses, which will help grocers offer 15-minute delivery.
Founded in 2012, Instacart has raised a total of $2.9 billion in funding over 20 rounds, according to Crunchbase data.
Investors include prominent backers such as Andreessen Horowitz, Manhattan Venture Partners, D1 Capital Partners and Sequoia Capital.
Illustration: Li-Anne Dias.
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