It’s not a closed deal yet, but San Francisco-based grocery delivery platform Instacart is testing the waters for a potential IPO.
The company said late Wednesday that it had confidentially filed for an IPO despite a valuation cut from $40 billion to $24 billion in March.
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Overall, tech stocks have struggled this year as the Nasdaq is down nearly 30 percent from last November’s high. Instacart’s move is quite bold, as IPOs in general are down significantly in 2022 from where they ran in 2021.
In January we reported that inflation concerns triggered a massive sell-off across the board. As such, shares have taken a nosedive, effectively closing the IPO window. Matt Kennedy, a senior strategist at IPO research firm Renaissance Capital, said at the time that the average return on the offering price for companies that went public in 2021 was about minus 25 percent.
Brave or bad move?
Instacart is one of several tech companies to benefit from the 2020 lockdown caused by the COVID pandemic. As the country’s grocery shoppers were forced to buy goods online, the company generated revenue.
For the same reason, the company has stuttered as communities reopened, vaccines became available and shoppers returned to buying groceries in person.
For its part, Instacart is now pushing ahead with a new software suite that was announced this week and is set to be sold to supermarkets. Also on the agenda is a fulfillment service called Carrot Warehouses, which will help grocers offer 15-minute delivery.
Founded in 2012, Instacart has raised a total of $2.9 billion in funding over 20 rounds, according to Crunchbase data.
Investors include prominent backers such as Andreessen Horowitz, Manhattan Venture Partners, D1 Capital Partners and Sequoia Capital.
Figure: Li-Anne Dias.
Stay up to date on the latest funding rounds, acquisitions and more with Crunchbase Daily.
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