Source: Instacart had ad revenue of about $740M in 2022, up 30% from 2021; nearly 30% of Instacart's 2022 revenue came from selling ads
Instacart has become an advertising powerhouse. — The grocery-delivery firm's ad revenue totaled about $740 million last year, up 30% from 2021, according to a person familiar with the matter. LinkedIn: Alexis Ohanian Sr . Tweets: @coryweinberg , @patio11 , @teddypowday , and @amir See also Mediagazer LinkedIn: Alexis Ohanian Sr : You love to see it. 🥕 Instacart revenue surging. — (disclosure: I seeded instacart in 2012) — https://www.theinformation.com/ ... Tweets: Cory Weinberg / @coryweinberg : ~$740M, or 30% of Instacart's 2022 revenue, came from selling advertising rather than actually delivering groceries. That bolsters its profits. Will it cause problems with customers & grocery retailers? Big question facing the everlasting IPO contender: https://www.theinformation.com/ ... Patrick McKenzie / @patio11 : I don't know how many times we're going to learn the lesson “If you're a platform business and can direct incremental demand then charging for that is a very, very good business to be in.” https://twitter.com/... Teddy Blank / @teddypowday : Instacart: - doing $740m in ad revenue (+30% YoY, extremely high-margin) - ~$2b total revenue - ~10m active users - struggled to raise at $10-12b Tells you everything you need to know about how horrendous the unit economics must be on the delivery biz https://twitter.com/... Amir Efrati / @amir : Instacart is “basically an advertising company.” https://www.theinformation.com/ ... by @coryweinberg ft. @tanayj [image] See also Mediagazer
Context & Ripple Effects
This May report landed months before the numbers were public, and it reframed what kind of company Instacart was taking to market. The ads unit only launched in 2019; by 2022 it was generating ~$740M, up 30% YoY, and nearly 30% of total revenue. When Instacart later filed its IPO paperwork showing a $428M net income after a $73M loss the prior year, this high-margin ad line was the obvious explanation investors reached for.
The follow-on data made the shift starker: in H1 2023, revenue grew 30%+ while gross transaction volume grew only ~5% — meaning growth now comes from monetizing each basket harder, not more baskets. That decoupling is why this story matters beyond one company's S-1.
First-order effects
- CPG brands gain a channel where they can advertise at the exact point of grocery purchase against real basket data — a capability search and social ads don't offer them directly.
- Instacart's P&L flips: the same year this ad revenue was booked, the company reported $428M net income versus a $73M loss in 2021.
Second-order effects
- Retailers whose shelves Instacart digitizes face pressure to capture that ad spend themselves through their own retail-media arms rather than cede the margin to the platform.
- At its September IPO pricing, Instacart raised at a ~$10B fully diluted valuation versus the $39B private mark of 2021 — a reset that forces the story to be told on ads-margin economics, not delivery-volume growth.
Third-order effects
- If the pattern holds, grocery delivery platforms are structurally becoming retail-media businesses with a logistics arm attached, and ad yield per transaction becomes the metric markets price them on.
- Grocers' response — building competing ad businesses on their own first-party data — points toward retail media consolidating into a standard profit layer across e-commerce, not a niche add-on.
The trend: Commerce platforms are converting purchase-intent data into high-margin ad revenue faster than their underlying transaction volumes grow, making retail media the decisive profit engine of online grocery.