All Access

Retail Deals

Standard

Retail Deals Alerts

Alert

Retail Deals Thought Bubble

Thought Bubble

mustard

BFD Expert Voices - Retail Deals

BFD Expert Voices

topics

politics-policy

epstein-files

donald-trump

2026-midterm-elections

immigration

behind-the-curtain

race-and-equity

technology

privacy-tech-regulation

automation-and-ai

tiktok-news

big-tech

social-media

cybersecurity

economy

social-security

inflation

tariffs

federal-reserve

jobs

transportation

business

stock-market-news

retail-news

crypto

media

elon-musk

dealmaking

health

rfk-jr

drug-prices

axios-explains-abortion

public-health

world

israel

axios-explains-ukraine

iran

russia

china

energy-climate

nuclear-energy

climate-energy-policy

climate-change

extreme-weather

alternative-energy

electric-vehicles

science

emerging-tech

biomedicine

newsletters

pittsburgh

atlanta

san-diego

charlotte

boulder

washington-dc

kansas-city

dallas

denver

detroit

des-moines

austin

boston

chicago

cleveland

columbus

houston

indianapolis

miami

nashville

new-orleans

nw-arkansas

philadelphia

phoenix

portland

richmond

salt-lake-city

san-antonio

san-francisco

seattle

tampa-bay

twin-cities

raleigh

huntsville

colorado-springs

axios-local

axios-pro

axios-live

the-axios-show

Instacart's IPO won't just be a boon for Wall Street and Silicon Valley, but it also will offer a fresh data point on the health of e-commerce.

Why it matters: Rivals will be reading tea leaves.

What they're saying: "The main takeaway from Instacart's S-1 is that e-commerce becomes an exciting business only with advertising," one grocery delivery executive tells Axios.

About 30% of Instacart's revenue last year, or $740 million, came from advertising.

Pepsi, a top advertiser with Instacart, is investing $175 million in a private placement alongside the IPO.

If Instacart wants to surpass a $1 billion revenue threshold, "they only get there by huge joint business plan and upfront deals with Pepsi, Kraft P&G, you name it," says Andy Friedland, chief revenue officer of retail tech company Swiftly.

Yes, but: Major grocers may not take kindly to more ad deals with major CPGs, given the potential to cut into their own sales.

Grocers also are losing control of first-party data and how that's monetized when they work with Instacart, Friedland says.

"Instacart can control a large amount of that data, given that they own the last mile," he adds. "From a competitive perspective, I think the biggest risk is that Instacart can become their own grocery store."

In the weeds: Instacart is all but ensuring itself a successful IPO by floating less than 10% of its shares, and securing cornerstone investors, says one private equity capital markets head.

While not perfectly correlated, a smaller float may, on average, boost an IPO pop, per Nasdaq. 

In 2020, the average float for an IPO was around 20%. 

One portfolio manager notes that two-thirds of Instacart's offering is "being eaten up by pre-subscription" investors — and that the company's prospective $10 billion valuation is partially attributable to that, alongside pent-up demand.

There's also a possibility that pre-subscription investors back out after a 90-day blackout period — leaving retail investors holding the bag, he adds.

The bottom line: Instacart is arming itself with capital to go on the offensive, positioning it to compete in ongoing delivery sector consolidation.

Instacart IPO is a big test for e-commerce

an illustration of the wall street bull holding a green shopping basket in its mouth

Initial public offerings (IPO)

Instacart&#x27;s IPO won&#x27;t just be a boon for Wall Street and Silicon Valley, but it also will offer a fresh data point on the health of e-commerce.Why it matters: Rivals will be reading tea leaves.

Instacart IPO is a big test for e-commerce

What to read next