You must know that there are a lot of food and grocery delivery services out there but we have seen that some of the very popular ones are the likes of Instacart and Uber’s Uber Eats along with DoorDash at least in the US and other parts of North America. Now, Instacart which is considered one of the biggest in this segment is all set to launch its IPO and they have also decided to keep its share price at $30 per share which also means that its valuation comes to a total of $10B which is quite a lot more than the others we have already talked about.
As per the report, “Instacart has sacrificed growth for profitability, proving in the process that its business model can generate earnings. Revenue increased 15% in the second quarter to $716 million, down from growth of 40% in the year-earlier period and about 600% in the early months of the pandemic. The company reduced headcount in mid-2022 and lowered costs associated with customer and shopper support.” It is also mentioned that “Instacart started generating earnings in the second quarter of 2022, and in the latest quarter reported $114 million in net income, up from $8 million a year prior.”
CNBC also reports that “At $10 billion, Instacart will be valued at about 3.5 times annual revenue. Food-delivery provider DoorDash, which Instacart names as a competitor in its prospectus, trades at 4.25 times revenue. DoorDash’s revenue in the latest quarter grew faster, at 33%, but the company is still losing money. Uber’s stock trades for less than 3 times its revenue. The ride-sharing company’s Uber Eats business is also named as an Instacart competitor.”
“Only about 8% of Instacart’s outstanding shares were floated in the offering, with 36% of those sold coming from existing shareholders. The company said co-founders Brandon Leonardo and Maxwell Mullen are each selling 1.5 million, while Mehta is selling 700,000. Former employees, including those who were in executive roles as well as in product and engineering, are selling a combined 3.2 million shares”, the report adds. It is also worth noting that “Instacart co-founder Apoorva Mehta owns shares worth over $800 million, and is selling a small portion of them in the IPO”