Instacart files for a US IPO, reports 2022 revenue up 39% YoY to $2.55B, $428M net income, up from a $73M loss in 2021, and H1 2023 revenue up 31% YoY to $1.48B

Axios 2023-08-28 Dan Primack

Context & Ripple Effects

The filing follows a period in which Instacart had already been preparing for public markets: its 2022 quarterly results showed revenue, orders and order volume expanding, while an internal update later pointed to stronger fourth-quarter revenue and gross profit. Earlier growth in orders and order volume provided the operating backdrop for the offering.

The more immediate pre-filing picture was mixed in a consequential way: H1 2023 revenue was reported to be growing above 30%, while gross transaction volume grew only about 5%. That divergence between revenue and transaction-volume growth makes the durability and source of monetization central to the IPO case.

First-order effects

Instacart enters the U.S. IPO process with audited-looking headline evidence of a shift from a 2021 net loss to 2022 net income, giving prospective investors a clearer basis to assess the business.
The filing puts the company’s revenue growth, profitability and first-half 2023 performance under public-market scrutiny as it seeks to price an offering.

Second-order effects

Investors and comparable delivery platforms are likely to be judged more closely on whether revenue can outpace transaction volume without weakening customer demand or retailer participation.
For Instacart, the IPO narrative shifts from private-company growth to the quality and repeatability of monetization, especially as its reported revenue growth exceeds transaction-volume growth.

Third-order effects

If this pattern persists, grocery-delivery platforms may be valued less as pure order-growth businesses and more on their ability to generate durable, profitable revenue from an established transaction base.
Public listings can raise disclosure and performance expectations for a category whose growth measures do not necessarily move in lockstep; whether that produces a durable valuation reset depends on subsequent results.

The trend: Instacart’s filing is one data point in the maturation of delivery platforms from growth-led private companies into public-market businesses evaluated on profitable monetization.

Discussion

@trevorcroker Trevor Croker on threads
Hi! This is Instacart, your latest tech IPO! I just arrived at the SEC and I'm going to get started on a Nasdaq listing ; please let me know if you would like anything else in the meantime. https://www.cnbc.com/...
@glinden.bsky.social Greg Linden on bluesky
Net profit looks like it is better described as breakeven after removing the tax benefit of $358M. And that's only because of putting a lot of ads in the product which might cause growth problems long-term. The core problem remains, smaller market if they charge what is necessa…
@harjtaggar @harjtaggar on x
When you consider all the parameters in picking and delivering a single grocery order, it's mind boggling to imagine Instacart does it 263 *million* times a year. Congratulations ⁦@apoorva_mehta⁩ ⁦⁦@Max⁩ and team 👏 https://www.wsj.com/...
@modestproposal1 @modestproposal1 on x
Thanks everyone who responded. According to blog posts by both Instacart and Databricks, Instacart began using Databricks in the last year. Additionally Instacart talks about significant improvements in efficiency with Snowflake. So combo of migration and optimization. [image]
@brackin Andrew Brackin on x
Instacart's ad business has massive potential. CPG advertising is such a massive % of ad spend that wants to move online. Has barely been touched by SEM, social, etc.
@eric_seufert Eric Seufert on x
Instacart was one of my original, canonical “Everything is an Ad Network” references. Per its S-1, filed today, the company generated $740MM in ad revenue (+ “other") in 2022 on $2.5BN in total revenue, for roughly 30%. Everything is an ad network. [image]
@modestproposal1 @modestproposal1 on x
Lots to chew on in Instacart S-1, but was curious what people make of this. Their Snowflake bill was $13M, $28M, $51M in 2020/21/22. 2023 bill will be $15M. Is that just “optimization”? Did they migrate? Is that indicative of the magnitude of optimizations? What's the read here? …
@bgurley Bill Gurley on x
Numbers look impressive on first read. Congrats to team.
@ericjackson Eric Jackson on x
You can't call it a tech bubble until Instacart IPOs...
@jason @jason on x
They really turned this business around over the years... in the face of a lot of headwinds. Congrats to the @instacart team (we are users of good eggs, UberEats AND Instacart)
@alex @alex on x
ok so the klaviyo and instacart IPOs are super solid re: profits and growth and should do fine wonder if they will shake loose other entrants what we need next is some kinda ok middle-tier unicorn that is still burning cash to try and get out
@edwinwee Edwin on x
Congrats to one of @Stripe's first users. From multiparty payments to instant payouts to tax compliance, growing alongside Instacart has been a journey. (In rare instances, you may encounter a Stripe moonlighting as an Instacart Shopper making sure the UX on our side is right.)
@cityofthetown Tom Dotan on x
“We believe that the COVID-19 pandemic and its variant outbreaks had minimal impact on our order volume following the third quarter of 2022” You can pretty much pinpoint in the Instacart S1 when Americans stopped caring about Covid. https://www.sec.gov/... [image]
@ericnewcomer Eric Newcomer on x
Sequoia and D1 are the only firms listed as owning more than 5% of Instacart
@sarthakgh Sar Haribhakti on x
Instacart and Uber are tracking to cross a billion in annual ads revenue very soon
@alexisohanian @alexisohanian on x
Congrats @apoorva_mehta @Max and the entire @Instacart team for making something people love. Proud to be a seed investor 🌱
@natebecker Nate Becker on x
Heyyy Instacart's S-1 just dropped! It has lots of key new figures in it like revenue, profit and transaction volume. Oh wait, they're not new because @coryweinberg reported them all last weekend: https://www.theinformation.com/ ...
@pitdesi Sheel Mohnot on x
Gross profit of 6.4%. Surprised that the Covid bump didn't mean-revert, though CaC has gone up a lot [image]
@eringriffith Erin Griffith on x
what is this, a profitable gig economy startup? https://www.nytimes.com/...
@iankar_ Ian Kar on x
Interesting from Instacart's S-1: for every $110 AOV transaction made, Instacart makes $7 in gross profit [image]
@pitdesi Sheel Mohnot on x
Instacart S-1 launched 262M orders/yr (flat YoY) $28B GTV / $109 AOV (⬆️ 4%) $2.5B revenue (⬆️ 31%) The part that surprised me most: $740M Ad revenue! (⬆️ 24%) Point-of-purchase ads are powerful!
@rachelmetz Rachel Metz on x
today has been full of surprises, not the least of which being that instacart's actual business name is apparently maplebear! (is this a canadian thing? i think one of the founders is indian and canadian.)
@iankar_ Ian Kar on x
wait...why is SoFi Securities listed as an underwriter for the Instacart IPO? [image]
@garrytan @garrytan on x
Instacart files for its IPO Huge congrats ⁦@apoorva_mehta⁩ ⁦@fidjissimo⁩ 🚀🚀🚀 https://www.axios.com/...
@coryweinberg Cory Weinberg on x
Looks like it will be a decently sized IPO. Norges Bank, TCV, Sequoia Capital, D1 Capital Partners, and Valiant. “have indicated an interest, severally and not jointly, in purchasing shares of common stock in an aggregate amount of up to approximately $400 million”
@coryweinberg Cory Weinberg on x
NEWS: Instacart IPO filing says Pepsi (a big advertiser) agrees to be a new investor in the company in a private placement, at the TBD IPO price. This may help juice its IPO demand. Full Filing here: https://www.sec.gov/...
@eringriffith Erin Griffith on x
also LOL at maplebear LLC guys change your cutesy dba before the s-1
@eringriffith Erin Griffith on x
ipos are back baby
@mattbelloni Matthew Belloni on x
Overpriced and late, no doubt...
r/wallstreetbets r on reddit
Instacart files for its IPO

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