Aug 25, 2023 - Economy

Instacart files for its IPO

Illustration of a grocery cart with the Instacart app icon inside.

Illustration: Brendan Lynch/Axios

Grocery delivery giant Instacart on Friday filed for its initial public offering, with expectations that its shares will begin trading on the Nasdaq next month.

Why it matters: The IPO window is finally opening, after being closed for more than a year.

The big picture: The number of IPOs for the 18 months beginning January 2022 is lower than for any single year since 2016.

  • There have been a few significant U.S. IPOs in 2023, including Johnson & Johnson spinoff Kenvue and restaurant chain Cava. Plus a recent filing for chip design giant Arm.
  • Instacart is considered more of a bellwether than those other names, particularly for the glut of "unicorn" companies that are sitting in venture capital fund portfolios.
  • And it will be joined by marketing automation company Klaviyo, which also filed for an IPO today — after being valued at $9.5 billion by venture capitalists.

Macro: A publicly traded Instacart could give economists new insights into food consumption trends, given that it claims to work with more than 80% of physical grocers.

  • This includes running the back-end for consumers who go directly to websites for companies like Publix, Wegmans and Kroger.

By the numbers: Instacart was valued at $39 billion during its last private round in early 2021. Since then, however, it's repeatedly reset its share price, most recently to $13 billion.

  • The San Francisco-based company reports $428 million in 2022 profits, and $242 million in profits for the first six months of 2023. A lot of that appears to be driven by "large basket" orders of at least $75, which are usually more profitable than smaller ones. Instacart says its average 2022 basket size was $110.
  • Revenue was $2.55 billion in 2022 and $1.48 billion for first half 2023. As of June 30, it had nearly $2 billion of cash on hand.
  • Its two largest outside shareholders are venture firms Sequoia Capital and D1 Capital Partners.

Look ahead: Instacart still needs to set a price range and launch a roadshow, both of which are expected to occur in September.

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