Instacart is set to make its debut on the Nasdaq under the symbol “CART” on Tuesday following the announcement of its initial public offering (IPO) price at $30 per share.
The IPO, consisting of 22 million shares, includes 14.1 million shares being sold by Instacart and 7.9 million shares being sold by specific selling shareholders.
Current indications suggest that Instacart’s shares will open at $42, which is higher than the $30 IPO price.
With a sales growth of about 590% in 2020, primarily driven by the pandemic, Instacart’s decision to go public comes after years of anticipation. The company was previously valued at $39 billion in its latest funding round.
Instacart’s CEO, Fidji Simo, discussed the company’s performance and future plans in a CNBC interview on Tuesday.
Addressing competition, particularly from gig economy platforms like Uber Technologies Inc UBER and DoorDash Inc DASH, Simo highlighted the fundamental differences between restaurant and grocery delivery markets. Instacart’s strong integration with grocers, representing 85% of the industry, gives it a significant competitive advantage.
Simo added that Instacart serves as an enabler for retailers rather than a competitor, distinguishing it from platforms like DoorDash.
When asked about the possibility of Instacart launching its own grocery business in the future, similar to DoorDash’s “DashMart,” Simo reiterated the company’s long-term stance against such a move, citing Instacart’s extensive supply and selection through its grocers.
She stated that deep integration, coupled with new AI-enhanced inventory insights, are the primary factors behind Instacart’s exceptional customer experience.
While Instacart is primarily known for its grocery delivery service, the advertising segment of the business is also gaining attention in relation to the IPO. Accounting for nearly 30% of the total revenue, this high-margin and rapidly-growing sector is providing significant value to Instacart.
Simo confirmed that advertising works hand-in-hand with their retail partners, bringing them additional customers.