Instacart Files for Proposed IPO

In SEC filing, grocery tech leader reveals revenue and profit increases
Gina Acosta
a woman smiling for the camera
Instacart's IPO had been anticipated since last year.

Grocery technology leader Instacart revealed impressive profit and revenue gains Friday in paperwork related to its plans to go public in the next several weeks.

In its prospectus filed with the Securities and Exchange Commission, Maplebear Inc., which does business as Instacart, said its revenue increased about 31% to $1.5 billion for the first six months of the year. Transaction revenue grew from $1,262 million (or 69% of total revenue) in 2021 to $1,811 million (or 71% of total revenue) in 2022, an increase of 44%, and from $799 million (or 71% of total revenue) for the six months ended June 30, 2022, to $1,069 million (or 72% of total revenue) for the six months ended June 30, 2023, an increase of 34%.

[Read more: "Instacart Now Accepts SNAP Online in All States"]

The company says improvements in unit economics and operating leverage have helped it drive $242 million of net income and $279 million of adjusted EBITDA in the first six months of 2023, compared to $74 million of net loss and $(20) million of adjusted EBITDA in the prior year period. 

Instacart, founded in San Francisco in 2012 and backed by more than $2 billion in venture funds, is the largest grocery delivery company by sales. The company says it has 7.7 million active customers who spend about $317 per month on Instacart.

According to its prospectus, Instacart says orders grew from 223.4 million in 2021 to 262.6 million in 2022, an increase of 18%, and remained consistent from 132.3 million for the six months ended June 30, 2022 to 132.9 million for the six months ended June 30, 2023.    

Advertising and other revenue grew from $572 million (or 31% of total revenue) in 2021 to $740 million (or 29% of total revenue) in 2022, an increase of 29%, and from $327 million (or 29% of total revenue) for the six months ended June 30, 2022 to $406 million (or 28% of total revenue) for the six months ended June 30, 2023, an increase of 24%.

Instacart has now been profitable for five straight quarters, according to the filing. PepsiCo has agreed to purchase $175 million of the company’s stock.

According to the filing, Instacart says it believes it is "well positioned to benefit from the long-term opportunity in online grocery and to grow our business. Our market opportunity remains significant at $1.1 trillion, and we see a clear runway to support our growth as only 12% of that spend was online as of 2022. We partner with over 1,400 retail banners that collectively represent more than 85% of the U.S. grocery market, with a clear opportunity to deepen these relationships as online penetration grows.

"As grocery spend becomes increasingly omnichannel, we believe that more of the approximately $200 billion that CPG brands spend to advertise their products will follow, representing another compelling growth vector as nearly 25% of that spend is through online channels as of 2022. We believe our market leadership and over a decade of investment in technology custom-built for online grocery put us in a position to capture this long-term opportunity while still navigating near-term macroeconomic headwinds and ensuring the best experience for our retailers, customers, brands, and shoppers," the company says in its Form S-1.

The company also said it has maintained its "strong share of sales among select digital-first platforms."

"The sales volume of our retail partners generated through Instacart Marketplace and Storefront represents the leading share of sales based on total online grocery sales in the United States of certain digital-first platforms in both larger and smaller order sizes, representing 74% of orders greater than $75 and 56% of orders less than $75 for the six months ended June 30, 2023. Compared to the six months ended June 30, 2022, we have maintained share for orders greater than $75 and increased share from 54% of orders less than $75, despite new entrants in online grocery with order volumes more concentrated in smaller basket sizes.92 Our market opportunity remains significant at $1.1 trillion today, and we see a clear runway to support our growth as only 12% of that spend was online as of 2022. Online grocery penetration could double or more, reaching as high as 35% over time. As the leading grocery technology company in North America, we believe we are best positioned to benefit from this long-term online adoption and grow our business."

The number of shares to be offered and the price range for the proposed offering have not yet been determined. Instacart intends to list its common stock on the Nasdaq Global Select Market under the symbol "CART."

Earlier this week, Instacart launched a suite of new platform features for Instacart shoppers that aims to simplify their experience – from logging into the app to delivery – making shopping and delivering as seamless and secure as possible.

“Giving shoppers the tools and support they need so they can shop how and when they want is incredibly important to us,” said John Adams, VP of shopper and fulfillment product at Instacart. “We’re committed to adding new features to the shopper app that help streamline the shopper experience and eliminate any issues that may arise, so shoppers can focus on doing what they do best – providing excellent service to their customers.”

These updates are expected to roll out to all shoppers and customers in the coming weeks.

Log in faster with passkeys. Shoppers can now log in using their device’s facial recognition and fingerprint identification features for faster and more secure access to their shopper account. After enabling passkeys, shoppers will no longer need to verify account information via text when signing in, meaning that they’ll be able to start shopping more quickly.

Ensuring quick and easy deliveries. Instacart has improved address data, giving customers the option to match their provided in-app addresses with those listed in the USPS database so shoppers can have confidence that the address they’re delivering to is accurate. Instacart is also prompting customers to provide more detailed information like unit and floor numbers, to help shoppers locate the customer more easily. For nighttime deliveries, the company is now sending customers a notification to turn their porch light on if it’s dark outside. Not only does this help shoppers identify the delivery location, but it can also provide a level of security for shoppers. Additionally, after a delivery is made, Instacart is enabling shoppers to chat with customers for up to 20 minutes to ensure a successful completion of the order. 

San Francisco-based Instacart partners with more than 1,400 national, regional and local retail banners to deliver from 80,000-plus stores across more than 14,000 cities in North America.

This year, Progressive Grocer was named a finalist in the Eddie & Ozzie awards for its exclusive profile of Instacart CEO Fidji Simo: “Instacart is Ready for the 'Groceryssance’”.

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