What Instacart, the tech unicorn that lists in New York, does
One of its founders worked for Blackberry, Qualcomm and Amazon but also launched about 20 startups that all failed, until it was Instacart's turn that made him a billionaire at 33. All the details on the app which is listed on the Nasdaq in New York today
Although the golden times known in the Covid-19 period are long gone, Instacart, an app for food delivery in the United States and Canada, is listed today on the Nasdaq in New York.
After a slow start to the year due to uncertain economic prospects, Instacart's announcement is not the only one of late. In fact, it is estimated that in just over two weeks, US IPOs have so far grossed over $5 billion .
Are US markets really thawing?
WHO FOUNDED INSTACART
Founded in 2012 by Apoorva Mehta, Max Mullen and Brandon Leonardo, Instacart is headquartered in San Francisco.
Mehta, now president of the company, was born in India, lived in Libya and at the age of 14 moved to Canada, where he graduated in engineering. He worked at Blackberry and Qualcomm before joining Amazon in 2008 as a supply chain engineer.
After leaving Jeff Bezos' giant, he launched around 20 startups between 2010 and 2012. All failed. But with Instacart he became a billionaire at the age of 33.
WHAT INSTACART DOES
Instacart, whose CEO is Fidji Simo (former Facebook manager), is considered a pioneer in online grocery delivery. From the San Francisco bay, over the years, it has expanded into 10 large US cities, including New York and Los Angeles, until landing in Canada. Today it has more than 500 thousand customers .
Its peculiarity lies in having introduced a new model of online shopping and home delivery. A personal shopper who does the shopping is also available to customers, who can view, choose and purchase products from a selection of stores via the site or app. The user pays and chooses a time slot, a shopper picks up the items and delivers them.
However, Instacart offers access not only to grocery stores but also to pharmacies, department stores, pet supply chains and office supply retailers.
After a free trial, delivery charges start at $3.99 for same-day orders over $35.
THE IPO
Almost three years after the start of preparations for the listing on the stock exchange, Instacart is ready to land in New York, setting the share price for its IPO at $30. Among the major investors, as reported in the document filed with the Securities and Exchange Commission (SEC), include Sequoia Capital and D1 Capital Partners.
“At $30 per share – writes Bloomberg – Instacart's IPO would raise $660 million and the company would have a valuation of $9.9 billion”.
“That's a sharp decline from the $39 billion valuation it achieved in a 2021 funding round, when its business was booming amid pandemic shutdowns, but it's still one of the largest companies to go public on the stock exchange this year”, observes the economic newspaper.
Quartz said last week that although the delivery service has "survived the transition to a post-Covid economy, that doesn't mean Instacart's future profitability is guaranteed." However, he continued, “investors will be looking for the stock to take off quickly as the tech sector rebounds after a year of de-risking.”
THE OTHER IPOS IN THE USA
Instacart's IPO comes just a few days after that of the British microchip company Arm . Furthermore, today the listing on the stock exchange of the US marketing automation company Klaviyo is also expected and a few days ago the German Birkenstock presented its IPO.
Per Bloomberg , Instacart's offering "is giving equity capital markets the relief they need after the longest drought since 2009, in the midst of the financial crisis" and "as a venture-backed consumer startup, success in Its debut on the stock exchange could open up the IPO market to other companies wishing to go public."
U.S. IPOs have raised more than $5 billion in the past two weeks, making September the second-biggest month of 2023, according to data from financial markets platform Dealogic reported by Reuters .
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/cosa-fa-instacart-lunicorno-tech-che-si-quota-a-new-york/ on Tue, 19 Sep 2023 09:08:55 +0000.