Instacart IPO rumors are spreading. The company is one of the most anticipated IPOs of 2022 after facing rapid growth. Moreover, the company recently confidentially filed with the SEC. However, the company may be in over its head…

So, what’s the latest news on Instacart stock? Here’s what we know…

Instacart IPO: The Business

Instacart IPO rumors are spreading that the app-based grocery delivery service is going public.

CEO Apoorva Mehta co-founded Instacart alongside Max Mullen and Brandon Leonardo in 2012. The San Francisco-based company provides an online marketplace with delivery and pickup services. Currently, Instacart is available in over 5,500 cities in North America. It’s estimated that the app can be used by 85% of U.S. households and more than 70% of Canadian households.

Instacart offers services from over 700 retailers. In addition, it operates across more than 40,000 stores with over 500 million products to choose from. While it was originally designed for groceries, Instacart offers a variety of new categories, including…

  • prescriptions and over-the-counter medications
  • office supplies
  • electronics
  • health, beauty and wellness
  • home decor
  • sports equipment
  • alcohol

This allows consumers to shop for nearly anything through the app without ever leaving the comfort of their homes. Moreover, the effects of the pandemic caused many people to stay home, which accelerated the company’s growth.

Pandemic Accelerated Demand for Online Ordering

The past two years have been a wild ride for many companies. When COVID-19 came to the U.S., there were mandatory quarantines across the nation. People couldn’t leave their homes, restaurants and stores closed and a lot of people were (and are) afraid to get infected or infect others. Instacart became a huge hit during this time. People could now do all their shopping without leaving their houses. The company also offers no-contact delivery, with workers leaving the groceries at the customers’ door.

The company added more than 15,000 new store locations to the Instacart marketplace. Instacart’s growth, combined with the “new normal,” makes it an appealing investment opportunity to investors. In an April 2021 report, Laurentia Romaniuk, Instacart’s Trends Expert, said

Online grocery fits seamlessly into the more flexible schedules that the world is moving toward after a collective awakening to the benefits of remote work. Given the trends we’re seeing, we expect many consumers to stick with their new mid-week grocery delivery routines, now that they’ve experienced the flexibility that online platforms like Instacart give them to build and maintain shopping lists throughout the week and easily place an order in between meetings and personal time, to be delivered in as fast as two hours.

Many people have gotten used to the hands-free and efficient use of online ordering and delivery/pick-up services. Additionally, they plan to continue using these convenient services past the pandemic. This became evident when the company’s valuation more than doubled in less than a year, catching the eye of major investors.

Instacart Slashes $39 Billion Valuation

In March 2021, Instacart completed its latest funding round. Existing investors included Andreessen Horowitz, Sequoia Capital and Fidelity. Altogether, the funding round raised $265 million.

The funding gave Instacart a staggering $39 billion valuation. Meaning the company doubled its valuation from $17.7 billion in less than 5 months. The figure landed Instacart the title for the 4th largest United States investment unicorn.

However, this proved short-term with the latest news. As pandemic restrictions ease and Covid-19 caseloads decline, stay-at-home stocks become less attractive to investors. And this is proving to be true with Instacart too. The company announced in March that it had lowered its own valuation almost 40%, to $24 billion. However, some investors feel its valuation should be closer to $15 billion. The lowered valuation reflects the challenging market conditions.

Because Instacart is private right now, its finances are, too. However, The Information reported that the company’s 2021 revenue stands at $1.65 billion. The figure represents 10% growth year-over-year. However Instacart also reportedly posted a net profit in Q2 2022, which shows it has been able to keep up with the changing market.

After the cut valuation, analysts are wondering how much an Instacart IPO could raise. However, news recently broke that the company confidentially filed. So, most importantly, when can investors expect Instacart stock?

Instacart IPO Confidential Filing Details

Up until recently, an Instacart IPO was just a rumor. However, the company recently announced that it filed a confidential draft registration statement with the Securities and Exchange Commissions (SEC) to list Instacart stock on the public market.

Because the filing is confidential, the details for the public offering are under wraps for now. In other words, the IPO date, price range and offer shares are unknown. Additionally, the company didn’t announce a market or ticker symbol.

Prior to the slashed valuation, sources believed that the company behind Instacart stock could debut with a $50 billion valuation. But with its valuation so up in the air, it’s unknown where it stands now in a public debut.

Instacart is planning for somewhat of a unique IPO. It was reported recently that the bulk of the shares it will be listing won’t be new shares. Instead the majority of the shares will come from the sale of current employees’ shares.

According to the company, the registration statement will become effective after the SEC completes its review process. Although, this is subject to market and other conditions. If everything goes smoothly, investors should start preparing for Instacart stock to list by the end of 2022.

As always, make sure to research before you invest. IPOs can be volatile for the first few months. And share prices can change quickly. But if IPO investing interests you, check out our top recent IPOs and our IPO calendar. We update it regularly to give you the latest news on upcoming and filed IPOs.

Investors appear bullish about the possibility of Instacart stock. However, the company relies on online shopping trends continuing post-pandemic. Instacart will have to time the market right to have a successful offering. If you’re interested in an Instacart IPO, keep an eye out for updates as we release new information.