We all are familiar with online shopping and its popularity. This craze has seeped into other sectors as well. Today, you can find anything online and get it delivered to you in a single day. Groceries are something we need daily and buying them can be a hassle. Instacart is one of the most popular grocery delivering apps. Like with any other big company, investors eagerly want to invest in Instacart stock. In this article, we will inform you about Instacart IPO and Instacart IPO share price.
Instacart IPO Date, Stock Price, Valuation
The popularity of Instacart and the increasing market of online shopping makes Instacart IPO a desirable IPO for many investors. It is one of those IPOs that is bound to succeed. Let us learn more about the company and Instacart IPO share price.
We all know what supermarkets are, don’t we? You go to a mini-mall that is specially built for FMCG products from where you pick up stuff like food items, soaps, washing powders, spices, etc. Well, Instacart is not a supermarket but it is a company that ties up with supermarkets like this.
Instacart is a grocery delivery and pick-up service company that operates in the US and Canada. This means that they pick up your orders from supermarkets like Walmart and other partner stores or retailers, pack them, and then deliver them to your doorstep just like your food delivery apps or couriers reaching your home. The company also delivers alcohol on day orders in the US. While the company service is unique in itself they are looking to integrate AI technology into it to make it even better.
It was founded in 2012 that made its mark only recently in the middle of the pandemic which is a huge point to consider in itself. The company had more than 3,00,000 employees during the pandemic that worked for them which is more than a 100% jump from its current number of employees. Over the years Instacart has acquired lots of funding and a few AI startups and other companies to keep innovating and growing their business model.
The company truly began expanding in 2016 when it spread across the US. The business model they run is simple, you pay a delivery fee on your order depending on your order size. There is also a service fee which starts from a minimum of 2 dollars. The company also offers its customers the option to choose between regular services or opt for membership using which they can avail of further benefits.
From 2012 to 2022, Instacart has been around for 10 years and in that, it has seen a lot of ups and downs and challenges on various fronts but it battled them all and weathered the storm to finally arrive at a position where it could file for an IPO.
That’s right, 2022 was set to be that marquee, a big year for the company as this was when the company planned to come out with its IPO. Everything was set and in place for the IPO. In May the company filled out the paperwork to carry out the process. All of this was done secretly and then the people were informed.
Little did anyone know that the bubble was set to burst. Before the Instacart IPO could even reach the application stage the company’s plan had changed and there was no IPO in plans any longer. What looked like an inevitable move suddenly got canceled. One day the IPO was right on track and then the next day it just wasn’t there. The excitement now turned into worries and negativity as the environment around the company and its IPO plans were dropped all of a sudden.
But those who had been following the company since the beginning knew that this was to be expected and indeed was a good move. The company had been slashing its valuation throughout the year which anyways had the people bothered and the final step to make the ultimate correction and prevent a mishap from taking place was to cancel the IPO.
Apoorva Mehta, Max Mullen, and Brandon Leonardo founded the company in 2012 and its CEO is Fidji Simo. This was not the first business that Apoorva Mehta planned on starting when he left his job at Amazon. He did his graduation in 2008 and was part of a startup accelerator in 2012 where the journey of Instacart began.
Having worked at various top companies Apoorva wanted to now start his own business and he tried his luck with 20 businesses in the field of social networking where he wanted to build a platform for lawyers. His other attempt included building an ad network for social gaming companies among others before Instacart was born.
Change in Instacart Valuation over the years
Starting with 200 employees in 2015 the company spread from San Francisco to other parts of the US. While the expansions kept on happening across the US and Canada as well, the company raised 400 million dollars in funding in 2015 against a valuation of 3.4 billion dollars. By 2018 the company had started acquiring firms.
This was just the start, from here on the Instacart valuation was set to touch the sky as the business was set to take bigger strides ahead. In 2018 the company further raised 200 million dollars against a valuation of 4.2 billion dollars. In the same year, the valuation saw a big jump when the company raised additional 600 million dollars against a valuation of 7.6 billion dollars. From 2015 to 2018 the valuation more than doubled showing the rapid rate at which the company was growing.
In the same year, one last funding round saw the company raise 271 million dollars at a valuation of 7.87 billion dollars making it the smallest jump in valuation so far. One of the biggest jumps in the company’s valuation happened between 2018 ending and October 2020 when the company raised 200 million against a valuation of 17.7 billion dollars which was more than double the valuation in December 2018. The company was far from done as it then went ahead and raised 265 million dollars in March 2021 at a valuation of 39 billion dollars which was again a jump of more than 100% in the company valuation and the biggest to date in its history.
However, it was not always going to be about going higher as the company’s valuation was about to see a fall similar to its meteoric rise from here on. In March 2022, one year after meeting its highest valuation the company slashed 40% of it to bring the valuation to 24 billion dollars, the biggest drop for them. Post this, the move for Instacart IPO was announced in May and in June the valuation of the company was slashed down to 15 billion dollars. That wouldn’t be the last time that the company slashed its valuation as the most recent slash came in October when the valuation further dropped to 13 billion dollars which was just one-third of the amount of its highest valuation ever in March 2022. Let us now learn about Instacart IPO share price.
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Instacart IPO Share Price
Who would have seen it going this way for Instacart? From raising millions of dollars on a valuation of billions of dollars to reaching a summit of valuation of 39 billion dollars only for it to come crashing down to one-third the value in less than a year. If that was not it the company also called off the IPO it had planned for the year 2022. However, the SEC filing signed by the company has not been withdrawn yet which is like the light ray of light at the end of the tunnel for investors who were interested in this company stock.
Now that there is no IPO in place there is no Instacart IPO share price to talk about. But, let’s look at what we could have expected from this IPO which is surely one for the future. On the positive side, you see that the company made huge and paced strides in accumulating a lot of funds and multiplying their valuation for fun. Then you have the company foraying into the AI space to innovate its business while also growing and expanding to newer markets continuously.
Don’t forget that the company has been making acquisitions as well. They also entered the alcohol business and signed up for new partnerships. The most important thing to remember about the company is that it is a pandemic darling, a company that arrived at the scene and benefited the most during the pandemic which makes it a strong company ready to face the harshest of challenges.
On the flip side, you have the timeline of the last year when the company saw its valuation come down to one-third of its highest valuation. Apart from this, the company has had its fair share of controversies and cases. Entry into the market for other companies is not that difficult which is also bad for Instacart and you also see the canceled IPO as a sign of doubt.
So with plus points and minus points to compare one would think that Instacart IPO share price would be decently priced. The big players with knowledge of the subject valued each share at about 38 dollars. This might exactly be the reason they opted out of the IPO as of now. The company had not much to gain from the market conditions and its high valuation which is why it slashed its valuation and delayed the IPO and this might be the decision that pays them well in the long run. This was all about Instacart IPO share price.
So now that the IPO is not on track for a release this year or anytime soon as per the latest developments, there is naturally no idea about what’s going on behind the scenes. There is no application date or closing date set for the application. This also means that no allotment or refund date is set as of yet.
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Since the IPO has been called off and no applications were filed before doing so or as of yet, there is no data available regarding QIB, NII, Retail, and Employee quota nor is there any information as to how many times the shares have been subscribed by each category. New developments are expected when the IPO is back on the market again and the process to get it listed begins.
Instacart Stock Public
If the Instacart IPO went ahead as planned then the company would see the shares valued at around 38 dollars as shared above. Instacart stock public buying was to happen in 2022 after the company had been rocketing sky-high with its sales, revenue, profits, valuation, etc. But then why was it cut out?
Different sources reveal different stories but the endpoint is more or less the same. The company was overvalued if the calculation made by Capital Group is to be believed. The company as per them was valued at 14.7 billion dollars in the Summertime which is when the company started moving from its huge valuation of 39 billion dollars to a closer figure of 13 billion dollars in three installments.
Club all of this with the tech companies doing badly this year and the market conditions being hostile. The IPO market in general has been bad with inflation on the rise and interest rates doing the same. So it made sense for the company to decide against going public just about yet. On the other hand, the company has not by any means stopped innovating itself and making acquisitions.
SWOT analysis of Instacart
The positives and the negatives of the Instacart IPO have been shared above but that’s not all that you need to make a rounded analysis. A company has strengths, weaknesses, opportunities, and threats that contribute to helping make a well-rounded decision on matters like whether or not to invest in a said company and that is why here we present the SWOT analysis of Instacart.
- Using Instacart gives users flexibility. You can schedule the shopping and delivery time and interact with the buyer in real-time to make changes to the order at any point in time.
- The company has partnered with a lot of retailers which has helped them make their operations easier and quicker.
- The company suppliers are not only trustworthy but also make sure the process takes place smoothly and on time which makes the customer experience perfect.
- The company advertising targets customer psychology to get their attention.
- The company gives away complimentary stuff to its customers if the delivery time is more than usual and that is surely appreciated.
- The pricing on the app is budget friendly and competitive which benefits the company and the customer.
- The company has set up in place to help its customers 24/7.
- The variety of products available through Instacart is impressive.
- The company has great employees and is also introducing AI to its business setup which surely are both good things for its customers.
- The company’s business model is very good and has so far helped it increase its revenue year after year.
- If an item is not available with Instacart delivery partners then you have no option but to either opt for a substitute product or give up on it. Also, retailers can challenge the company by introducing their delivery service which means its partners can at any time spoil the business for the company.
- The business grew during the pandemic but those were different times and they might not perform similarly once we move further away from the pandemic and that might hurt their business.
- Growing the scale of the business has affected the service offered to customers which is reasonable for the company to get quite a few negative ratings recently.
- Again the growth has hampered the company’s image as its franchise has been creating problems of its own for the brand.
- The company faces quite a lot of operation difficulties because of its franchise being located far off.
- The company has introduced technology to its business time and again which the customers have now been habituated to and so the company will now have to keep up with innovations and because of this technology costs will eat up their profits.
- The platform does not have a good coupon or reward system in place for its customers which is harming them in more ways than one.
- No matter how good a move it was to slash Instacart valuation and to stop Instacart stock public offering, the move surely created a bad image of the company in the eyes of the potential investors.
- With so much intent on involving technology and AI in its business the company should aim to make its recommendation for a substitute option better than what it currently is.
- The company can and should look to make a move to expand its operations in other countries.
- The company can include low-fat and low-calorie meals in its meals menu to make its offerings more healthy.
- There are still a few products that their rivals sell but they don’t and including such products can be a good opportunity to increase their business.
- Investing so much in AI means that the company has more and more opportunities to tap into their customers using newer technology and that should help them stay ahead of the competition.
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- Instacart is no longer the only player in the market. The competition is at the door and some of them are companies like Amazon with huge customer bases and financial capacity.
- The retailers can use the opportunity to promote their own business and improve their service which can hamper Instacart’s growth.
- The service quality of Instacart is under scrutiny and if nothing is done to improve it then the company might lose business to competitors.
- Pricing is not one of the best features of the company and this might take away quite a few customers.
- Government law changes have seen the company struggle and falter a few times and this remains a problem for the future as well.