May 8, 2021

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Instacart valued at $ 39 billion in funding before its IPO

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The Instacart grocery delivery app has raised $ 265 million from its existing investors, doubling the company’s valuation following the pandemic boom in demand.

Instacart, the U.S. market leader in the grocery apps industry, said the cycle valued the company at $ 39 billion, up from $ 17.8 billion in its previous fundraiser, which ended. in November of last year.

The company said it intended to use the money to increase its workforce by around 50% this year, a wave of hiring that would be spread across the company.

The cash injection comes as the company lays the groundwork for a long-awaited initial public offering. In January, she announced that she had hired Goldman Sachs banker Nick Giovanni as the new CFO. Giovanni had previously been involved in Airbnb and Twitter IPOs.

“The past year ushered in a new normal, changing the way people buy groceries and products,” Giovanni said in a statement announcing the latest round.

“Although grocery is the largest retail category in the world, spending $ 1.3 billion annually in North America alone, it is still in the early stages of its development. digital transformation. ”

The company declined to comment on its schedule for going public.

Last week, Instacart added its first independent board members – Facebook chief Fiji Simo, and Barry McCarthy, former CFO of streaming platforms Spotify and Netflix.

Notably, McCarthy was the architect of Spotify’s direct listing in 2018, a process by which a company goes public without creating new shares.

Over the past year, Instacart has been a major beneficiary of the lockdown conditions, with many brick-and-mortar retailers restricting access to walk-in stores.

To meet demand, Instacart’s concert membership has grown to over 500,000 nationwide. During 2020, the company said it added more than 200 retailers and 15,000 more locations to its app.

However, the company faces increasing competition from other delivery apps – such as Uber – and other online grocery offerings from retailers such as Walmart and Amazon.

And, as pandemic conditions ease, interest in online grocery shopping may wane, suggested Neil Saunders, an analyst at GlobalData. He also warned that Instacart risked being kicked out by grocery stores once they have their own e-commerce strategies more firmly in place.

“Ironically, the online reader has actually made retailers much more interested in investing in their own systems,” Saunders said. “If retailers decide to go it alone, that leaves Instacart in the cold.”

The company said it will use the latest funding to increase its investment in its fledgling advertising business, as well as Instacart Enterprise, its ‘white label’ service for businesses that want to use Instacart logistics with their own branding. .

The tour was led by Andreessen Horowitz, Sequoia Capital, D1 Capital, Fidelity and T Rowe Price.



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