Instacart, the grocery delivery company, said Wednesday it will test the waters before a public offering, despite recent shakiness for tech stocks and the company’s own turmoil over the past year.
The company said it had filed papers for a so-called confidential filing, meaning it has not yet released certain details about the company. The submission doesn’t require Instacart to go ahead with an initial public offering, but it’s considered a big step toward it.
If Instacart goes public, it’s will do this at a risky time† Wall Street, rocked by inflation and the war in Ukraine, has been cool for technology stocks in recent months, with IPOs falling 80 percent from a year earlier, on May 4, according to Renaissance Capital.
Instacart, which matches customers at home with shoppers who select groceries in stores and then deliver them, has solved its own problems. In March, the company lowered its valuation from $40 billion to $24 billion, a rare move for a privately-held start-up. Some workers grumbled that the change amounted to a pay cut.
As Covid cases increased in 2020, the company saw its sales and revenue increase. But the acceleration slowed in the second quarter of 2021 as more people were vaccinated and returned to normal shopping habits.
From that moment on, the company is looking for a direction† It has tried to become more of a technology supplier to the supermarket partners it has worked with over the years, but they have reacted ambivalently to new products.
Instacart’s founder and chief executive, Apoorva Mehta, was replaced by a former Facebook executive, although he remained on as chairman of the board. Other top executives have also left, including two presidents.
Mr. Mehta had been involved in tense discussions with members of his board of directors, including talks he held last year with DoorDash and Uber about a possible takeover of Instacart, according to four knowledgeable people. (The New York Times chief executive, Meredith Kopit Levien, joined Instacart’s board of directors in October 2021.)
Instacart was founded in 2012 by Mr. Mehta, as well as Max Mullen and Brandon Leonardo. The main investors are Andreessen Horowitz, Sequoia Capital and D1 Capital Partners.
The move to IPO would be the next step in the new vision for Instacart prepared by Fidji Simo, the chief executive who stepped in for Mr. mehta. According to a person familiar with the situation, Instacart is working with Goldman Sachs and JP Morgan on the offer.
In a blog posted on Wednesday commemorating Instacart’s 10th anniversary, Ms. Simo didn’t speak directly about the company going public, but she said Instacart built technology for the next 10 years of its grocery store.
“We will have to navigate new challenges and volatile public markets along the way,” she wrote. “But we have a vision worth pursuing.”
