TRUISM
2 weeks ago
INSTACART APPOINTS VICTORIA DOLAN TO BOARD OF DIRECTORS
PR Newswire-Tue, Apr 16, 2024, 9:15 AM EDT
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SAN FRANCISCO, April 16, 2024 /PRNewswire/ -- Instacart (NASDAQ: CART), the leading grocery technology company in North America, today announced that Victoria Dolan, former CFO of Revlon, has joined the company's Board of Directors.
Dolan is a seasoned financial expert and business leader with more than 30 years of experience in the consumer packaged goods (CPG) and retail industries. Separately, after years of dedicated service, Jeff Jordan, General Partner at Andreessen Horowitz, and Barry McCarthy, President and Chief Executive Officer of Peloton, will retire from Instacart's Board of Directors when their terms expire at the company's 2024 Annual Meeting of Stockholders.
"Victoria's decades of experience and deep understanding of the CPG and retail industries will be invaluable as we continue to introduce new technology solutions for our partners.
We have a bold vision to build the technologies that power every single grocery transaction, and Victoria's expertise will be an incredible asset as we continue to transform the grocery shopping experience," said Instacart CEO and Chair Fidji Simo. "I also want to thank Jeff and Barry for their immeasurable contributions to Instacart. They both brought unparalleled expertise to our Board of Directors as we've grown and entered the public market, and we're grateful for their years of support."
Dolan's professional experience spans strategic planning, finance, supply chain, and operations at several respected companies. She served as CFO of Revlon for nearly five years, and prior to that, she spent nearly 10 years at Colgate-Palmolive, serving as the company's Chief Transformation Officer, Corporate Controller and Principal Accounting Officer, and Colgate-Palmolive Europe's Vice President of Finance and Strategic Planning.
Prior to Colgate-Palmolive, Dolan held multiple management positions with Marriott International, Inc. and The Coca-Cola Company. She currently sits on the Board of Directors for Stericycle, a company specializing in regulated waste management and compliance services, and advises several nonprofits on various financial-related matters.
"I'm thrilled to join Instacart's Board of Directors," said Dolan. "The CPG and retail industries have changed significantly over the last several decades, but never more so than over the last few years. In today's business environment, companies in this space need a technology partner they can trust to continue to deliver for them and their customers in new ways — and I firmly believe that Instacart is that company. I'm looking forward to working with Fidji and the rest of the Board of Directors to bring this company's ambitious vision to life."
Jordan's and McCarthy's Board terms expire at Instacart's 2024 Annual Meeting of Stockholders, and they will not stand for re-election. Jordan joined Instacart's Board of Directors in 2014, advising the company from its early start-up days through its public market debut in September 2023. McCarthy joined Instacart's Board of Directors in 2021, advising the company during a critical period of maturation as it charted a path to sustained, profitable growth.
Instacart expects that Dolan will replace McCarthy as Chair of its Audit Committee of the Board of Directors, effective as of its 2024 Annual Meeting of Stockholders.
In addition to Dolan, Jordan and McCarthy, Instacart's Board of Directors also currently includes Instacart CEO and Chairperson Fidji Simo; Ravi Gupta, Partner at Sequoia Capital; Meredith Kopit Levien, President and CEO of The New York Times Company; Michael Moritz, Former Partner at Sequoia Capital; Lily Sarafan, Co-founder and Executive Chair of The Key; Frank Slootman, Chairman of Snowflake; and Daniel Sundheim, Founder and CIO of D1 Capital Partners.
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TRUISM
1 month ago
IGA ANNOUNCES NEW NATIONAL PARTNERSHIP WITH INSTACART
Supermarket News Staff | Mar 12, 2024
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The partnership is intended to make it easier for IGA’s U.S. member stores to access Instacart’s technologies, insights, and benefits
The Independent Grocers Alliance (IGA) has announced a partnership with Instacart. The new partnership is intended to make it easier for IGA’s 2,000-plus member stores across the U.S to access Instacart’s suite of technologies, insights, and benefits.
“IGA’s partnership with Instacart gives our independent retail members access to a dedicated team and a suite of capabilities and services to help drive greater omnichannel efficiency and effectiveness,” IGA VP brand development Michael La Kier said.
IGA members will now have a direct line to Instacart Platform and Connected Stores technologies, including:
* Storefront, Instacart’s storefront white-label solution
* Caper Carts, artificial intelligence-powered (AI) smart carts
* Scan and Pay, allowing customers to checkout in store with their mobile phone
* Carrot Tags, electronic shelf labels with pick-to-light capabilities for employees, Instacart shoppers, and in-store customers
* FoodStorm, helping manage food service and order ahead offerings
* Out of Stock Insights, alerting stores in real time when an item is out of stock to help improve in-store sales
* Eversight, an SaaS platform that leverages dynamic rules management, AI-powered experimentation, and an easy merchant interface to drive business performance at scale across all channels
* Fulfillment as a Service, expands the ecommerce experience beyond delivery with curbside pickup services and overflow pick and pack support
Members of the Independent Grocers Alliance will also have access to Instacart’s App and website Marketplace, which gives retailers a way to connect with customers through the company’s marketplace and offer same-day delivery in as fast as an hour.
Several IGA retailers have already deployed Instacart solutions. Geissler’s Supermarkets, a seven-store IGA retailer with locations in Connecticut and Massachusetts, uses Instacart’s Storefront white-label solution to power their ecommerce platform, as well as plans to deploy Caper Carts, AI-powered smart carts, replacing most of its traditional shopping carts over the coming months.
With the new partnership, Instacart will have Merrick Rosner, head of revenue, local independent grocery join IGA’s National Retailer Advisory Board.
TRUISM
1 month ago
INSTACART EARNS MEDIA RATING COUNCIL ACCREDITATION
PR Newswire-Tue, March 19, 2024, 9:00 AM EDT
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New MRC Accreditation for Instacart Ads Impression, Click, and Viewability Metrics Gives Brands Trusted Metrics for Retail Media
SAN FRANCISCO, March 19, 2024 /PRNewswire/ -- Instacart (Nasdaq: CART), the leading grocery technology company in North America, announced its first advertising accreditation from the Media Rating Council (MRC). As of today, the MRC has granted Instacart accreditation for impression, click, and viewability metrics across the following advertising formats: Sponsored Product, Display, Shoppable Display, and Shoppable Video. Instacart is one of the first grocery tech companies - and one of few retail media networks - to receive MRC accreditation.
Today, Instacart works with more than 5,500 CPG brand partners to help them drive awareness, connect consumers with the products they love, and inspire consumers as they browse. Instacart is deeply committed to providing value for its brand partners, including delivering transparent measurement solutions. As part of this goal to provide trusted, standardized metrics, Instacart completed an in-depth, independent audit of its measurement for impression, click and viewability metrics. This was reviewed by an audit committee of MRC member organizations, and resulted in accreditation by the MRC1.
The MRC is a non-profit organization that has established standards for media and advertising measurement, and administered an accreditation process to verify compliance with those standards, since 1963. This accreditation means that Instacart's ad solutions meet the MRC's rigorous industry standards for digital advertising measurement, providing brands with even more confidence that their Instacart Ads campaigns are delivering results they can trust.
"Advertisers are overwhelmed with choice when it comes to retail media networks. As retail media continues to grow, trusted measurement is increasingly important for advertisers to make decisions about where to invest. Instacart is committed to building the tools and measurement capabilities that help our partners make the most informed, strategic decisions. We're proud of this accreditation and look forward to continuing to work with the MRC to maintain this level of quality and rigor in our advertising offering," said Chris Rogers, Chief Business Officer, Instacart
George W. Ivie, the Executive Director and CEO of MRC, said, "We congratulate Instacart for achieving MRC accreditation of Display and Video Impressions, Clicks and Viewable Impressions across the environments and in-scope placements served on the Instacart Marketplace. This demonstrates commitment to ensuring its advertisers feel confident that Instacart metrics comply with industry-accepted standards for quality measurement."
Instacart's impression, click, and viewability metrics are now accredited by the MRC across Sponsored Product, Display, Shoppable Display, and Shoppable Video ad placements served on the Instacart Marketplace in desktop, mobile web, and mobile app environments in both the U.S. and Canada.
Instacart's discovery ad products, like Shoppable Display and Shoppable Video ads, bring together rich media, storytelling and inspiration that drive conversion and results on Instacart. These upper-funnel products complement Instacart's Sponsored Product offering, which allows brands to secure premium digital shelf space and maximize sales and category share.
Today's news builds on Instacart's independent work with key third-party verification leaders like DoubleVerify (DV) and Integral Ad Science (IAS), including technical integrations for viewability and invalid traffic (IVT) measurement2. Instacart will continue to work with the MRC and other industry organizations to build and deliver high-quality ad measurement solutions to all of its CPG brand partners.
TRUISM
4 months ago
DOORDASH, INSTACART PRICES ON THE RISE FOR SEATTLEITES FOLLOWING APP-BASED WORKER LAW
By Louie Tran-Fri, January 12, 2024, 11:02 PM EST
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Customers who use apps including Uber Eats, Doordash, Instacart in the Emerald City will have to pay more beginning Saturday due to a new Seattle law that’s aimed to help app-based workers.
NEW LAW:
Seattle City Council passed the App-Based Worker Minimum Payment Ordinance, SMC 8.37, on May 31, 2022.
The law goes into effect Saturday, January 13, 2024, according to the City’s website.
According to the website, the ordinance applies to certain app-based workers (sometimes referred to as gig workers) and provides several rights and protections for covered workers, including the following:
· Minimum Payment: Right to minimum pay based on the time worked and miles travelled for each offer.
· Transparency: Right to upfront disclosures of offer-information and right to receipt and payment records.
· Flexibility: Right to access the network platform without limitations (except for health and safety limitations), right to not be penalized for limiting availability or refusing offers, and the right to cancel an offer with cause.
Network companies must pay the greater of:
· Minimum per-minute amount of $.044 and minimum per-mile amount of $.74 or
· Minimum per-offer amount of $5
The legislation was sponsored by Lisa Herbold (District 1 – West Seattle/South Park) and Andrew Lewis (District 7 – Pioneer Square to Magnolia), however, both are no longer on the City Council.
APP-BASED COMPANIES:
KIRO 7 News reached out to companies that would be affected, including Uber Eats, Doordash, Instacart, Grubhub, etc.
A spokesperson for each company shared a statement with us:
UBERT EATS:
“Uber supports and advocates for thoughtful earnings standards across the country that help all sides of the marketplace. Unfortunately, this one more than doubles the fees consumers will have to pay which means fewer orders for businesses, and less opportunities for delivery workers.” The spokesperson added, “Uber is supportive of paying couriers the minimum wage plus expenses and has demonstrated its commitment to working with stakeholders to reach that goal, however this earnings standard will do more harm than good.
This policy will undoubtedly make services more costly for eaters, and our modeling is clear that this will result in a loss of hundreds of thousands of orders for small businesses and will price out Seattleites from access to this service. That means a loss of thousands of job opportunities for delivery workers.”
A spokesperson added that customers will see a new $5 local operating fee in addition to an increased service fee.
DOORDASH:
“There are consequences to bad policy. The previous City Council left a legacy of higher costs and fees for all Seattleites. As a direct result of the costly and unnecessary rules they imposed, we’ll be introducing a new regulatory response fee on all orders within the city of Seattle. Unfortunately, we expect this will lead to lost revenue for local businesses and fewer earning opportunities for the very workers the regulations are supposed to help. We urge the incoming City Council to reconsider these harmful rules, which are only making the cost-of-living crisis even worse.”
INSTACART:
“Due to new regulations imposed by the Seattle City Council, we’re making several changes to how Instacart operates in Seattle. Some of these changes include reduced service options and pricing increases for customers, as well as pay changes for shoppers. As always, we will work to deliver the best customer and shopper experience despite the limitations put in place by the City Council, and we may need to make additional changes in response to these new set of laws.”
GRUBHUB:
“We’re taking appropriate steps to comply with the new legislation in Seattle while maintaining a sustainable business given the added costs to now operate in the market.”
“Grubhub is making adjustments to ensure our most dedicated delivery partners are available for more delivery opportunities, give more insight into earnings, and ensure they have information about accessibility and oversize items. Grubhub is proactively communicating to Seattle delivery and merchant partners regarding these changes to our platform.”
SMALL RESTAURANT OWNER:
KIRO 7 News spoke with Alexandra Serpanos, the owner of Nikos Gyros in Seattle who partners with app-based companies, including Uber Eats.
“I’m trying to keep this restaurant alive and afloat,” she said. “The margins are so slim. It’s so hard for small businesses and you see small restaurants closing.”
Serpanos said she had partnered with app-based companies, such as Uber Eats around 2021 to expand her customer base to combat the challenges she had faced – inflation, supply chain issues, staffing shortages, etc.
However, when the new law goes into effect, she said her restaurant will take a hit.
“We’re going to be impacted. The customers are going to be impacted.” She added, “I was hoping for that to grow and if people can’t afford it, that’s obviously going to impact my sales.”
“I can’t keep raising prices. There’s only so much people are willing to pay for a gyro or a salad,” she shared.
Serpanos encouraged people to support small local businesses as she and other small business owners navigate this new law.
“It pains me to see so many mom-and-pop shops open for decades and have to close and this is just going to be one more item on that list that’s going to lead to more businesses dissolving.” She added, “Continue to support your local businesses. And if you can’t do it through a delivery service, come in and pick it up yourself.”
KIRO 7 News also spoke with customers to understand how the new law will impact their decisions going forward.
Tybald Jourdan said he does not often order food delivery; however, the new law does not entice him to order on the apps.
“That’s crazy though,” he said. “Since I moved to Seattle it’s $10 extra to $15, plus the money you pay for your food, from what I saw, so with what they’re adding now, yea no thank you.”
Rik Schutte, who often orders food delivery said, “I’m glad to hear there is a focus on the drivers.”
“I’m less likely than to order out. I’m already a little bit weary of ordering out through Uber Eats or Grubhub or what have you because the fees are already pretty high up there. Some places it’s nearly double the cost of what that meal would have been,” Schutte added. “I probably will just try to come in and pick it up myself. So, I don’t know if that really helps the drivers at the end of the day if they’re losing that sale entirely.”
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TRUISM
5 months ago
INSTACART LAUNCHES BRANDS DATABASE TO CONNECT GROCERS TO CPGs
By Timothy Inklebarger on Nov. 16, 2023
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The database also includes information about product attributes, pricing, sales performance and contact information to establish direct contact with brands, the company said. / Photo courtesy: Shutterstock
Instacart on Thursday announced the release of new tools that will enable consumer packaged goods manufacturers to showcase their products for the delivery company’s network of more than 1,400 retail banners.
The Brand Explorer portal gives the San Francisco-based company’s retail partners the ability to review digital sell sheets with a wide variety of emerging brands and products, and “make smarter decisions when looking for new products to stock their shelves,” Instacart said.
In addition to browsing sell sheets, retailers can also filter their searches to specify particular trends, metrics and assortment gaps.
The database also includes information about product attributes, pricing, sales performance and contact information to establish direct contact with brands, the company said.
“We know that driving distribution in more stores is a significant challenge for emerging brands. They’re working hard to break into a crowded industry, from attending trade shows to cold-calling retailers. Meanwhile, retail category teams are sifting through thousands of new products to find the right fit for their business and customers,” said Chris Rogers, chief business officer at Instacart, in a statement. “The process is still fairly manual and time-consuming for everyone involved. Instacart is well positioned to connect innovative brands with retailers looking to expand their selection, empowering everyone with easy-to-access insights directly within Instacart’s self-serve technology.”
Matt Meloy, vice president of sales at beef jerky company Chomps, said in a statement that its crucial for Chomps' success to share its vision and sales metrics with retailers. “We love that Instacart is creating a new opportunity for retail category managers to easily find brands like ours, see the sales our products are driving—like our new Taco Beef flavor—and connect with our team directly,” Meloy said.
The Brand Explorer portal's debut follows a string of innovations Instacart has rolled out over the last year in advance of its September IPO. They include its integration with e-commerce platform provider Shopify, enabling customers to connect with Instacart Ads products and insights, the company said.
Instacart's retail banners represent more than 80,000 locations in North America.
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5 months ago
SHAREHOLDER ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Instacart (Maplebear Inc.) - CART
By Globe Newswire-November 13, 2023 5:24 PM
NEW YORK, Nov. 13, 2023 (GLOBE NEWSWIRE) -- Pomerantz LLP is investigating claims on behalf of investors of Instacart (Maplebear Inc.) ("Instacart" or the "Company") CART. Such investors are advised to contact Robert S. Willoughby at newaction @workdog1, ext. 7980.
The investigation concerns whether Instacart and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
On or around September 19, 2023, Instacart conducted its initial public offering ("IPO"), selling 22 million shares of stock priced at $30.00 per share. After initially surging following the Company's IPO, Instacart's stock price declined sharply over the following weeks, with analysts predicting revenue growth of only 7% to 8% in the second half of the year, down sharply from prior periods.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered billions of dollars in damages awards on behalf of class members.
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7 months ago
MASTERCARD ANNOUNCES INSTACART AND PEACOCK REWARDS PARTNERSHIP
By Kanika Talwar-Mon, October 9, 2023 at 2:04 PM EDT
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Mastercard has announced its partnership for a new set of consumer spending rewards including Instacart and Peacock.
According to a recent Mastercard survey, 85 percent of American consumers have said they own a rewards credit card, with 95 percent of people noting that redeemable rewards and points are the major deciding factor when choosing a credit card.
Mastercard noted that these reward benefits “strategically impact areas where consumers frequently spend.” These benefits add to the existing Mastercard credit cardholder benefits such as rideshare, shopping and travel with partnerships such as Lyft, ShopRunner and more.
World Mastercard and World Elite Mastercard eligible credit cardholders who are new to Instacart+ will receive a free two-month trial and $10 off their second eligible Instacart purchase each month. Furthermore, cardholders will be eligible to receive no delivery fees on orders, reduced service fees and credit back on eligible pickup orders.
“This new embedded benefit builds on Instacart and Mastercard’s strong partnership, which includes powering shopper credit cards and co-branding our consumer credit card,” said Heather Rivera, vice president of corporate development strategy and partnerships at Instacart. “Instacart has become an indispensable service for millions of customers across North America and we’re excited for cardholders to experience the ease and convenience of shopping with Instacart. And with an Instacart+ membership, cardholders will save both time and money through member-only perks.”
Additionally, World Mastercard and World Elite Mastercard eligible credit cardholders new to Peacock Premium will receive a $3 statement credit on Peacock Premium monthly streaming subscriptions. Furthermore, all eligible World Elite Mastercard cardholders will receive a $5 statement credit on Peacock Premium+ monthly streaming subscriptions.
Cardholders will have access to the Mastercard Priceless Experiences such as NBC Universal’s studios and parks across the country, BravoCon and more.
“Now more than ever, consumers are looking for benefits and savings that meet their everyday needs,” said Seema Chibber, executive vice president of credit at Mastercard North America. “By adding on-demand grocery delivery and streaming services to our existing suite of card benefits, we remain committed to providing cardholders a combination of benefits that provide meaningful value and enhance the lifestyles they have built.”
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7 months ago
INSTACART PARTNERS WITH MOUNT SINAI, LAUNCHES CO-BRANDED MA PLANS WITH ALIGNMENT
By MARISSA PLESCIA-Oct 5, 2023 at 7:41 PM
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Through a partnership with Mount Sinai Solutions, Instacart is offering post-operative and post-partum patients a grocery stipend. Instacart is also launching co-branded Medicare Advantage plans with Alignment Healthcare that address food insecurity issues for seniors.
Photo: vgajic, Getty Images
Instacart launched a new partnership with Mount Sinai Solutions on Wednesday that provides post-operative and post-partum patients with grocery stipends. In addition, Instacart announced Tuesday that in 2024, it is offering co-branded Medicare Advantage plans with Alignment Healthcare that offer food as medicine programs to seniors.
San Francisco-based Instacart is a grocery technology company. With Instacart Health, the company is rolling out solutions to improve food insecurity. Mount Sinai Solutions is part of Mount Sinai Health System and serves employers and unions.
Through the new partnership, the companies will offer a $110 grocery stipend to patients of Mount Sinai Solutions’ employer and union customers after they leave a health facility for events like a joint replacement, birth or bariatric surgery. This partnership is available for patients who receive care at Mount Sinai facilities in New York City and extended partners in Connecticut, Florida, Massachusetts, New Jersey and Pennsylvania.
These funds can be used for fresh groceries, pantry items and household essentials. In addition, they’ll gain access to a Mount Sinai Virtual Storefront, where they can shop for provider-recommended foods from local, regional and national retailers through Instacart.
“The program gives patients covered by Mount Sinai Solution’s network the additional access, education and support they need through their recovery,” said Sarah Mastrorocco, vice president and general manager of Instacart Health, in an email.
As well as partnering with Mount Sinai Solutions, Instacart is working with Alignment Healthcare to launch co-branded Medicare Advantage plans starting January 1, 2024, in California’s Los Angeles, Marin, Orange, San Diego, San Francisco, Santa Clara and Stanislaus counties.
In addition, the Alignment Health Platinum + Instacart HMO plan will be offered to eligible Nevadans in Carson City and Clark, Douglas, Nye, Storey and Washoe counties. The plans are pending regulatory approval, however.
Members of these plans with a qualifying chronic condition will have access to $50-$100 quarterly grocery allowances from Instacart. They’ll also get an Instacart+ membership (which includes free delivery on orders over $35) and a customer support line to help members with their Instacart account. Like Mount Sinai Solutions’ patients, the plans will have an Alignment Health Virtual Storefront to shop items recommended by Alignment.
“By providing members with a curated Alignment Health Virtual Storefront on Instacart, they can easily shop from recommended items, add them to their cart and checkout using their health benefit card as payment,” Mastrorocco said.
The announcement of these plans comes after Alignment released a report that showed food insecurity and lack of transportation access are among the top social barriers affecting senior health.
Instacart declined to say the business model of the arrangements with Mount Sinai Solutions and Alignment Healthcare. Mastrorocco said the company aims to “use the power of Instacart’s platform, products and partnerships to empower healthy living. Working alongside health professionals, hospitals, businesses, nonprofits, researchers, and policymakers, we aim to champion nutrition access, resources, and education.”
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7 months ago
INSTACART SHARES FALL FURTHER BELOW IPO PRICE
By Noel Randewich-Wed, September 27, 2023 at 1:04 PM EDT
Reuters
(Reuters) - Instacart's stock dropped 4% on Wednesday, marking a fresh low a day after it closed for the first time under the price in the grocery delivery platform's high-profile initial public offering.
Shares of Instacart, formally called Maplebear, last traded at $28.71 compared to the $30 price set in its IPO on Sept. 18.
Retail investors bought almost $12 million worth of Instacart shares in the company's first trading session, and net purchases have steadily declined since then, amounting on Wednesday to about $100,000, according to Vanda Research, which tracks retail trades.
SoftBank-backed chip designer Arm Holdings fell 2.5% to $52.19, just above the $51 price in its IPO two weeks ago.
After closing with a gain of 12% in its first session, Instacart has steadily lost ground.
Arm's shares have also mostly declined after surging in their Wall Street debut, touching intra-day lows below $51 in three of the past five sessions.
Arm's and Instacart's recent listings have coincided with a drop in Wall Street's main benchmarks as investors worry that the Fed could keep interest rates higher for longer than previously expected.
Their lackluster performances since their market debuts add to doubts about whether a hoped-for revival in IPOs will materialize after a drought of more than 18 months.
Meanwhile, shares of Klaviyo, which debuted a week ago, climbed 0.6% to $34.32 on Wednesday. The marketing automation firm's stock remains above its $30 IPO price, but well below its intraday high of $37 in its first day of trading.
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7 months ago
Instacart's Stock Ends Below IPO Price for First Time
By Reuters-Sept. 26, 2023, at 4:23 p.m.
US NEWS
FILE PHOTO: Instacart employee Eric Cohn, 34, navigates a Safeway grocery store while preparing a delivery order while wearing a respirator mask to help protect himself and slow the spread of the coronavirus disease (COVID-19) in Tucson, Arizona, U.S., April 4, 2020. REUTERS/Cheney Orr/File Photo REUTERS
(Reuters) -Grocery delivery platform Instacart's stock on Tuesday closed for the first time below the price in its initial public offering.
Shares of Instacart, formally called Maplebear, dropped 1.65% to end the session at $29.89, compared to the company's IPO price of $30 on Sept. 18.
Chip designer Arm Holdings' stock dipped 1.69% to $53.52 compared to the $51 price set in its IPO on Sept. 13. After surging in its Wall Street debut, Arm's stock has mostly lost ground, and it has touched intra-day lows below $51 in three of the past four sessions.
Meanwhile, shares of Klaviyo, which debuted last Wednesday, dipped 1.6% to $34.11. The marketing automation firm's stock remains above its $30 IPO price, but well below its intraday high of $37 in its first day of trading.
The lackluster performances of Arm and Instacart's stocks since their market debuts add to doubts about whether a hoped-for revival in IPOs will materialize after a drought of more than 18 months.
(Reporting by Noel Randewich in Oakland, Calif., and by Niket Nishant in Bengaluru; Editing by Shweta Agarwal and Aurora Ellis)
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7 months ago
5 Reasons to Buy the Instacart IPO
Story by Rick Munarriz •24minutes ago
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I wanted to hate last week's Instacart (NASDAQ: CART) offering. The undisputed leader of third-party grocery deliveries hit the market with all the swagger and confidence of a shopper trying to sneak a dozen items through the 10 items or less checkout lane. I figured there was no way that Instacart would pan out as a long-term investment.
Am I an active user on the platform? Sure. It's convenient, and there are plenty of opportunities to buy Instacart gift cards online at a discount. There are also several credit cards that provide monthly credits to use the service. However, my doubts about the Instacart business model make up a lengthy shopping list. Will consumers put up with the platform's product pricing markups?
Can it incentivize its fleet of last-mile contractors in a gig economy with less laborious alternatives? With DoorDash and Uber Technologies encroaching on Instacart's turf, can it cling to its niche dominance?
Then I did what any good investor should do. I cracked open the offering prospectus and looked for the reasons to justify my initial bearishness. In the process of spooning through the metrics I found that Instacart tasted different -- better different -- than I was expecting. The red flags were there. The green shoots surprised me. Let's go over a few reasons why Instacart could be a winner for risk-tolerant growth investors.
1. It's a ground-floor opportunity
Instacart priced 22 million shares at $30 apiece late last week. It wasn't a surprise to see the shares skyrocket on their first day of trading last Tuesday. It's a high-profile debutante after all. The stock opened at $42, but hype collided with gravity. Instacart closed out the week exactly at $30.
Last week was a round trip to nowhere. Today's buyers can get in at the initial public offering (IPO) price, and not the elevated pop that some unfortunate individual investors chased out of the gate. An argument can be made that Instacart is expensive even at its IPO price.
Getting in on the ground floor isn't a bargain if the elevator then goes down to the basement. Instacart may or may not be a broken IPO in the coming months, but for now, waiting a few days for the stock to return to its $30 IPO price was the right move.
2. Revenue is still growing
Instacart mentions in its prospectus that gross transaction value has grown at a compound annual growth rate of 80% between 2018 and 2022, but the headiest of that growth took place early in that five-year timeline when Instacart was a lot smaller. It doesn't mean that Instacart isn't still posting double-digit-percentage gains on the top line.
Revenue for Instacart rose 39% last year, accelerating from the 24% ascent it posted in 2021. Revenue is up a healthy 31% through the first six months of the year. Despite DoorDash and Uber expanding beyond restaurant delivery and supermarket chain Kroger pushing its own direct-delivery model, Instacart is finding ways to grow its business.
3. Instacart is surprisingly profitable
One of the biggest surprises with Instacart is that it's already generating positive net income. Instacart was profitable last year even after backing out a favorable income tax benefit. It's only building on its results in 2023.
Instacart's operating profit was $62 million for all of 2022. It's at a beefy $269 million through the first six months of this year.
4. It's just getting started
Instacart is stickier than you think. It has facilitated 263 million orders for $29.4 billion in gross transaction value over the past four quarters. You pay a premium for the convenience that Instacart offers by saving you a trip to the store, but folks are paying. Instacart's 7.7 million monthly active orderers are spending an average of $317 a month on the platform.
U.S. online grocery penetration has gone from 3% of the market in 2019 to 12% last year. The ceiling isn't 100%, but it's a lot higher than 12%.
5. It all ads up
One of the more interesting morsels about the Instacart model is that advertising is a significant part of its revenue mix. Instacart generated $740 million in ad revenue last year, 29% of its reported revenue. It's a similar 28% share of the top-line mix through the first half of this year.
You might not think of Instacart as an advertising company, but it makes sense. Instacart offers home delivery for chains making up 85% of the U.S. grocery market. With 5,500 brands vying for attention, why wouldn't they pay Instacart to stand out at the moment of purchase, potentially minutes before delivery and possibly consumption?
These same brands pay physical grocery stores for prime shelf space and inclusion in weekly circulars. Instacart is feasting here as a tech platform without the burden of the razor-thin margins that plague supermarket operators.
Instacart doesn't belong in every investor's shopping cart. It's risky. However, take a closer look and you may be surprised to see it come home with you.
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TRUISM
7 months ago
Instacart (Maplebear Inc.) (CART) Receives a Hold from Wolfe Research
BY TipRanks-Sep. 24, 2023, 09:36 AM
LINK
Instacart (Maplebear Inc.) (CART – Research Report) received a Hold rating and price target from Wolfe Research analyst Deepak Mathivanan today. The company’s shares closed last Friday at $30.00.
Mathivanan covers the Technology sector, focusing on stocks such as Amazon, Ebay, and Meta Platforms. According to TipRanks, Mathivanan has an average return of 17.2% and a 62.32% success rate on recommended stocks.
Instacart (Maplebear Inc.) has an analyst consensus of Hold.
The company has a one-year high of $42.95 and a one-year low of $29.90. Currently, Instacart (Maplebear Inc.) has an average volume of 16.91M.
Based on the recent corporate insider activity of 24 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of CART in relation to earlier this year.
TipRanks has tracked 36,000 company insiders and found that a few of them are better than others when it comes to timing their transactions. See which 3 stocks are most likely to make moves following their insider activities.
Instacart (Maplebear Inc.) (CART) Company Description:
Maplebear Inc., doing business as Instacart, provides online grocery shopping services to households in North America. The company connects the consumer with a personal shopper to shop and deliver a range of products, such as food, alcohol, consumer health, pet care, ready-made meals, and others.
The company offers its services through a mobile application or website. The company was incorporated in 2012 and is based in San Francisco, California.
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7 months ago
Instacart’s stock dips below IPO price again, but it’s still too expensive, analyst says
Story by Tomi Kilgore •2days ago
LINK
THE RATINGS GAME
Shares of Instacart dipped below the key $30 level for a third straight day, but they still have to fall a lot further to turn one analyst bullish.
In a note titled “The Cart is Full,” BTIG’s Jake Fuller said he started coverage of the grocery-delivery app, officially known as Maplebear Inc. with a neutral rating. He did not set a stock-price target. BTIG was not one of the 20 underwriters of the IPO.
The stock fell as much as 2.3% to an intraday low of $29.95, or 0.2% below the $30 initial public offering price, before bouncing slightly to trade a penny above the IPO price in afternoon trading.
After debuting at $42 on Sept. 19, the stock closed its first day at $33.70. It hit an intraday low of $29.96 on Wednesday before closing at $30.10, and it traded as low as $29.90 on Thursday before closing at $30.65.
Read: Instacart IPO: 5 things to know about the app that’s looking to ride a ‘massive digital transformation’ in grocery shopping.
Fuller is meh on the stock because he believes that “valuation is fair relative to modest growth prospects and challenging competitive dynamics.” He noted that both Uber Technologies Inc. and DoorDash Inc. have moved into the grocery-delivery business.
“There are positives here with a strong market position, low category penetration, ancillary opportunities and healthy margins, but modest growth, ramping competition and valuation lead us to a neutral rating,” Fuller wrote in a note to clients.
Basically, he sees a lot of room for Instacart to grow, and the business is very profitable, but the market is getting crowded.
For Fuller to turn bullish, he said the stock would have to fall to the mid-$20s. That implies a roughly 17% discount to the IPO price.
Fuller is the second analyst to initiate coverage of Instacart. The first was Needham’s Bernie McTernan, who started the stock at hold, citing expectations that overall online grocery sales will come in below projections and that competition will increase.
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7 months ago
Settlement Payments from Instacart Lawsuit in San Diego Begin Friday
Story by Times of San Diego
MSN LINK
More than 125,000 people who worked for grocery delivery company Instacart are expected to receive payments starting Friday stemming from a lawsuit filed by the city of San Diego that alleged the company improperly classified workers as independent contractors.
In its lawsuit, the city alleged Instacart’s workers were deprived of protections and compensation they would have received as employees, such as overtime pay, paid breaks and reimbursement for expenses including gas mileage and cellphone data.
The case was settled last year and Instacart agreed to pay $46.5 million in restitution and penalties. Nearly $40 million of that total will be sent out this week as restitution, according to the San Diego City Attorney’s Office, which said the remaining civil penalty funds will be placed into a trust fund used for enforcement of consumer protection laws.
Eligible recipients worked as Instacart “shoppers” between Sept. 13, 2015 and Dec. 15, 2020 and should receive payments from settlement administrator Simpluris. The size of payments depends on the number of hours worked during that time period, but the City Attorney’s Office said the most active workers could see payments exceeding $10,000.
San Diego City Attorney Mara Elliot said in a statement, “Many vulnerable San Diegans depended on Instacart shoppers and other frontline workers to survive the COVID-19 crisis, and it is gratifying to see these workers finally get the respect and pay they deserve.”
After the settlement was reached, Instacart said in a statement that its California workers were always properly classified as independent contractors and noted the settlement contains no admission of any wrongdoing.
“We’re pleased to have reached an agreement with the city of San Diego. Instacart has always properly classified shoppers as independent contractors, giving them the ability to set their own schedule and earn on their own terms,” the company’s statement read. “We remain committed to continuing to serve our customers across California while also protecting access to flexible earnings opportunities for Instacart shoppers.”
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TRUISM
7 months ago
How Your Tips Made Instacart an $8 Billion Company
By Heather Tal Murphy-Fri, September 22, 2023 at 1:48 PM EDT
YAHOO NEWS
He’d long had a policy against accepting Walmart orders. When you’re an Instacart shopper, speed matters. In contrast with most grocery stores, the products at Walmart are quite spread out.
Still, the number that appeared on his Instacart Shopper app was tantalizing. Quan Tsang would make $130.75 for the 111-item order if—and this is always a big if—the customer followed through with the promised tip of $94.77.
Tsang opened it up to the other delivery people who follow him on TikTok, asking, “Would you take this Instacart batch?”
“Hell yeah,” one follower wrote. It was among the biggest batches many of them had ever seen. But others were cautious, given that customers have two hours, after their order has been delivered, to reduce their tip. “Tip baiting”—when a customer lists a misleadingly high tip to get someone to quickly take the job—happens.
“Nope because I would hate to have to burn their house down if it was a tip bait lol,” one woman wrote. (Instacart has offered to compensate shoppers, up to $10, in some tip-baiting incidents.)
Without the tip, Tsang, who lives in pricey Orange County, California, would be using up gas to schlep to Walmart for a grand total of $36 to $46.
Tsang hit accept.
It’s this kind of calculus that has helped make Instacart, as of this week, a more than $8 billion public company. The grocery delivery service debuted on the Nasdaq on Tuesday at around $30 a share, making its young founder a very rich man and inciting conflicted feelings among the shoppers that the tip-reliant business model depends on.
Last year, around 7.7 million individuals and companies regularly ordered groceries and home goods from Instacart. The company acquired these customers without hiring a single full-time delivery person.
The people who do the grocery shopping and transport bags to customers’ doors are all contract workers like Tsang who travel in their own vehicles. In most of the country, they get no hourly wage, and the flat fee—attached to most orders—is tiny; in July, ahead of its IPO, the company lowered the minimum pay from $7 to just $4.
The company bumps this figure up a little based on factors like total items and distance. But ultimately, the only reason high-caliber shoppers like Tsang have stuck around—beyond valuing the schedule flexibility—is the tips that make up the bulk of their payout.
The shoppers I spoke to feel that—now more than ever—Instacart needs to do a better job helping them get those tips. Their requests were straightforward. Many urged doubling tipping defaults from 5 percent—the option that Instacart suggests for large orders—and $2—the default option that Instacart places on many small orders. Still others urged Instacart to take responsibility for making it more clear to customers how their delivery workers get paid.
We all know that in the United States waitresses and bartenders get most of their income from tips. But that’s not necessarily true in the delivery industry. FreshDirect, an online grocery provider that is popular in the New York area, pays an hourly rate.
Blue Apron, one of a handful of other publicly traded food-delivery companies, outsources shipments to non-tip-based companies like FedEx. Further adding to the confusion, Instacart lists a $4 “service fee” that doesn’t actually go to shoppers. (Instacart states this on its site, but it’s easy to get confused by the invoice.)
In a conversation about compensation, a spokesperson for Instacart said that the company supports shoppers by getting them tipping and batch payment information upfront. The company has touted the many ways it says it’s trying to boost tips for shoppers, including urging customers who gave five-star ratings to increase the amount.
But without understanding that their shoppers are working almost entirely for tips, a customer might think that adding one more dollar to a $600 order is generous.
As Tsang entered the Foothill Ranch Walmart in Lake Forest, California, he scanned his list and looked at the Instacart timer. Each order offers a goal time. Tsang always beats his by a long shot.
“I take a lot of pride in my shopping speed,” Tsang said. Surpassing it does not come with a reward. It simply means you are available to take on more orders.
Tsang likes working as a shopper partly because it allows him to watch his kids while his wife is in school. He works seven days a week and responds to Instacart orders from 11 a.m. to 1 p.m. and from 4:30 to 8:30 p.m. Since he’d only spotted the order at 6:30, he hoped he could still pull it off. He didn’t have the store mapped in his head, so he got off to a slow start once inside.
Shoppers don’t know what’s in the batch until they hit accept. This can make for some uncomfortable surprises … like sex toys. (It happens!) There was nothing like that this time, but he was frustrated to find that he had to return to the makeup area about 10 times to get someone to unlock a desired item for him. And that the customer kept adding items as he shopped. By the end he had two carts, overflowing with organizational containers. Checkout took 20 minutes.
The actual delivery is where things get interesting. On the positive side, you might meet a customer who insists on knitting your baby a blanket. This happened to Angela Davis, who worked as an Instacart shopper in Maryland throughout her pregnancy. (She’d be even more pleased, she said, if Instacart compensated shoppers for good ratings.)
On the challenging end, some customers want to talk … and talk. Sometimes allowing a lonely stranger to share a story feels good, said Jessica Smalley, a shopper in Portland, Maine.
Sometimes it’s stressful.
Some customers do strange things, like insist on praying for you in tongues, Sara Amber Victoria, another shopper in Southern California, told me. (That’s not her real name, but the one she uses on social media.)
She also once had a man open the door fully clothed, only to undress further each time she brought in a bag. “The last time I went up, he was in his underwear. I got out of there SO quick!” she wrote to me. She reported him to Instacart.
For Tsang, the Walmart delivery customer turned out to be perfectly, unremarkably pleasant. Two hours and 40 minutes after he’d accepted his order, Tsang was ready to call it a night. Soon after he arrived home, he confirmed that the tip came through: He’d made $135, around $45 an hour.
This was well within his goal of $30 to $50 bucks an hour. (This is double many other shoppers’ goals.) And for some shoppers, particularly those working in lower-income, lower-tipping, lower-demand areas, this would be a reason to celebrate. (One shopper in Atlanta shared on TikTok that she’d been struggling to make $150 a week through Instacart lately—a huge drop from pandemic times, when she could make $1,500 to $2,000 a week.)
But Tsang felt mildly irked. No, this was not one of those lawsuit-inspiring reports from a few years back of shoppers making a few bucks an hour.
Still, he’d hoped for a 10 percent tip on an order of that size, but he was pretty sure this was lower. He couldn’t be certain because shoppers never see how much customers pay—$98 is 9.4 percent of the $1,042 Walmart charged.
But the Instacart app routinely marks up items on the customer end. (Instacart kicks markup responsibility to the stores, which the company says prices items for Instacart delivery.) He suspected it might have actually been closer to a 7 percent tip.
Like other shoppers I spoke to, Tsang felt that Instacart should adjust the default tip setting to 10 percent. Studies show that defaults heavily impact how much people pay, even if they can modify the amount.
In 2022, customers spent, on average, $317 per month, according to Instacart’s own Securities and Exchange Commission filings. Grocery orders of $200 are pretty common in Southern California, Tsang said. At 5 percent for a tip, that means shoppers could only expect a $10 tip on top of the base batch pay of $4 to $7.
“All they need to do is set the default to 10 percent and so many shoppers will be far better off,” Tsang said.
It could also be good for Instacart. As the company states in its SEC filings, one of the biggest risks to the future of its business is failing to retain quality shoppers. It’s hard to keep people at $14–$17 for an hour and a half of work.
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7 months ago
INSTACART STOCK SUBDUED AS DEBUT ENTHUSIASM LOSES STEAM
Savyata Mishra and Niket Nishant-Updated Wed, September 20, 2023 at 12:10 PM EDT
LINK
Instacart's stock fell 5% on Wednesday, as the grocery delivery app joined other new stock market entrants in failing to keep up with strong gains on debut.
Investors were hoping that a recent wave of new listings would reignite the IPO market after a near 18-month dry spell, but stocks including chip designer Arm and RayzeBio have slipped from their debut highs amid persistent worries about high interest rates and inflation.
The market seems unsure of whether the economic conditions can continue to support the elevated valuations of those IPOs, said Mark Luschini, chief investment strategist at Janney Montgomery Scott.
Instacart, which counts Costco Wholesale, Kroger and Aldi among its retail partners, has seen its orders grow despite the pace slowing from pandemic highs as people stick with their lockdown habits of ordering groceries online.
"We are seeing ... the realization that consumers are still facing a cost-of-living crisis and that their willingness to pay an additional charge for home deliveries may be weaker than assumed," said Stuart Cole, chief macro economist at Equiti Capital.
Shares of the San Francisco-based firm were hovering at $32, after closing 12% higher in their Nasdaq debut on Tuesday, failing to hold onto an intraday gain of as much as 43%. The company's initial public offering on Monday had given it a valuation of nearly $9.9 billion.
"Enthusiasm for the company will be challenged by its ability to sustain margin expansion and revenue growth while facing elevated food price inflation and increased competition from food delivery providers Walmart, Amazon, and traditional grocers," said Alex Frederick, senior emerging technology analyst at PitchBook.
Instacart's total revenue for the six months ended June 30 rose 31% year-over-year while gross profit grew 44%, the company had revealed in its IPO filing.
The listing came almost three years after the company kicked off preparations to go public. In August, it announced interest from PepsiCo, which has agreed to buy $175 million in preferred convertible stock.
(Reporting by Savyata Mishra and Niket Nishant in Bengaluru, Additional Reporting by Ankika Biswas; Editing by Anil D'Silva and Devika Syamnath)
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7 months ago
INSTACART SHARES RISE 12.7% IN NASDAQ DEBUT
Mark Hamstra | Sep 19, 2023
LINK
IPO nets grocery-delivery specialist more than $420 million, per reports
Newly issued shares of grocery-delivery specialist Instacart rose 12.7% in their debut on the NASDAQ exchange on Tuesday, closing at $33.80.
The initial public offering of 22 million shares was priced on Monday at $30 per share, but the stock (listed as CART) hit the market around midday at $42 per share before gradually trailing downward in afternoon trading.
The offering netted the company more than $420 million, according to a CNBC report.
At its opening price of $42 per share, the company was valued at about $14 billion, which several reports noted was much less than the $39 billion valuation the company enjoyed in 2021 after its sales soared during the height of the COVID pandemic. The pre-IPO pricing of $30 per share valued the company at $10 billion.
“This IPO is not about raising money for us,” Instacart CEO Fidji Simo said in an interview on CNBC on Tuesday. “It’s really about making sure that all employees can have liquidity on stocks that they work very hard for. We weren’t looking for a perfect market window.”
According to the CNBC report, Instacart co-founders Brandon Leonardo and Maxwell Mullen were slated to sell 1.5 million shares, and Apoorva Mehta, another co-founder, was selling another 700,000 shares. Former employees were selling a combined 3.2 million shares.
Simo noted that the company has been profitable for five consecutive quarters, although its transaction volume has slowed somewhat recently.
For the first six months of this year, Instacart in its IPO prospectus reported net income of $242 million on revenues of $1.475 billion, compared with a loss of $74 million on revenues of $1.126 billion in the year-ago, six-month span.
The company said it filled 132.9 million orders in the first half of 2023, up slightly from 132.3 million in the first six months of 2022.
Some analysts were cautious about Instacart stock, noting that profitable growth could be difficult to achieve as competitors such as Shipt, DoorDash and Uber Eats seek a larger share of the grocery-delivery market.
“As online grocery delivery rises in popularity, Instacart will find it tougher to maintain and take market share, as new competition floods into the industry,” said David Trainer, an analyst on Seeking Alpha, in a column on Tuesday.
In its prospectus, Instacart detailed three divisions of its business:
Instacart Marketplace, the platform that consumers use to shop for groceries from the retail stores that Instacart partners with. This is the “gig economy” aspect of its business that leverages independent shoppers and drivers Instacart Enterprise Platform, which retailers can use for a range of digital and ecommerce services
Instacart Ads, which offers a platform for CPG companies to advertise their products to Instacart shoppers
Each of these divisions has their own sets of competitors, which in some cases include the same retail companies that Instacart partners with.
In the interview with CNBC, Simo said Instacart “has an 11-year advantage” over its competitors, referring to its founding in 2012. That longevity has given the company a wealth of data and the opportunity for deep integrations with its retail partners.
She also reiterated that the company has no plans to open its own retail stores or own its inventory.
“We see ourselves as an enabler for retailers,” Simo said, noting that consumers are highly loyal to their grocery stores and are interested in the breadth of inventory that they carry.
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7 months ago
INSTACART DELIVERS IN ITS STOCK MARKET DEBUT
By The Associated Press | Today at 3:45 a.m.
LINK
An instacart logo and an instacart webpage are shown in this photo, in New York, Wednesday, Sept. 6, 2023. (AP Photo/Richard Drew)
Instacart delivered in its stock market debut.
The grocery delivery company's shares -- priced at $30 per share ahead of the IPO -- hit a peak of $42.95 Tuesday in the first few minutes of trading on the Nasdaq stock exchange. They finished the day up 12.3 percent at $33.70, giving the company a market value of more than $11 billion.
At Instacart's San Francisco headquarters, CEO Fidji Simo and other executives celebrated the IPO by ringing a bell shaped like the company's carrot logo. Around 1,000 employees attended, the company said. Instacart's shares are trading under the ticker symbol "CART."
The IPO is a long-awaited step for Instacart, which was founded in 2012. The company filed privately for an IPO in May 2022 but delayed those plans last fall when the markets were roiling due to recession fears. There were just 71 IPOs in the U.S. last year, the lowest number since 2009, according to Renaissance Capital.
But a resurgent market is seeing more IPO activity this year. Last week, shares of U.K. chip maker Arm Holdings rose almost 25 percent in their stock market debut on the Nasdaq, the largest IPO in nearly two years.
Joe Endoso, President at Linqto, an investment platform, said a successful listing by Instacart could prod others -- especially tech companies -- to consider IPOs in the coming months.
"The global financial markets are buzzing with optimism for a potential resurgence in the IPO market," he said.
Instacart raised $660 million in its initial public offering, selling 22 million shares at $30 apiece. The pricing of the IPO gave Instacart a market value of around $10 billion, significantly lower than the $39 billion value placed on it after a fund-raising round in 2021.
Instacart provides delivery and pickup from 85 percent of U.S. grocers, or more than 80,000 stores, using a network of 600,000 freelance shoppers. It also provides in-store technology, like smart carts and electronic shelf tags, and sells online ads to food companies and retailers.
It says it has 7.7 million active customers who spend about $317 per month on the platform.
In a letter to investors earlier this month, said grocery delivery has tremendous potential. The U.S. grocery market is a $1.1. trillion industry, but only 12 percent of sales are made online. She said she expects that to at least double over time.
"We have demonstrated our ability to help our retail partners drive strong growth and stay competitive in a complex and increasingly digital industry," wrote Simo, a former Facebook executive who became Instacart's CEO in 2021. Simo grew up in France and is the daughter and granddaughter of fishermen.
The grocery delivery market boomed early in the pandemic. Growth has stabilized, but the market is still about four times larger than it was in 2019, said David Bishop, a partner and lead researcher with Brick Meets Click, a consulting firm that specializes in online grocery shopping.
That market is also increasingly competitive. Instacart faces growing pressure from companies including Uber Eats and DoorDash, which both began delivering groceries in 2020.
As of August, Instacart controlled 70 percent of the third-party U.S. grocery delivery market, according to YipitData, a market research firm. DoorDash controls around 10 percent. This week, DoorDash added more U.S. grocers to its offerings, including Cub, Lowe's Markets and Eataly.
Instacart also faces pressure from grocers themselves, who sometimes bristle at the higher prices Instacart charges or at the pricing rules it puts in place for grocers using its software to run their own websites.
Instacart orders can cost consumers 15-20 percent more than shopping in stores because of delivery fees and product markups, Bishop said.
Some grocers have unwound partnerships with Instacart or built up their own delivery capability. H-E-B, a Texas chain, encourages customers to shop on its own site, not Instacart's, if they want lower-cost delivery, Bishop said. Other big grocers, like Walmart and Target, also do their own deliveries.
Food price inflation during the last two years has also dampened demand for delivery in favor of curbside pickup, which is less expensive. U.S. grocery pickup orders grew 3 percent to $10.5 billion in the April to June period this year compared to the same period a year ago, Bishop said. Grocery delivery orders grew just 1 percent to $7.8 billion.
Instacart's orders also slowed in the first half of this year after growing 18 percent between 2021 and 2022, the company said in its IPO filing.
Still, Instacart's revenue was up 31 percent to $1.47 million in the first six months of this year, largely due to increases in the advertising fees it collects from retailers and food companies.
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7 months ago
INSTACART'S IPO SURGES AS THE GROCERY DELIVERY COMPANY GOES FROM THE SUPERMARKET TO THE STOCK MARKET
ByDEE-ANN DURBIN AP business writer-September 18, 2023, 9:07 PM
ABC NEWS
An instacart logo and an instacart webpage are shown in this photo, in New York, Wednesday, Sept. 6, 2023. (AP Photo/Richard Drew)
The Associated Press
Instacart delivered in its stock market debut.
The grocery delivery company's shares __ priced at $30 per share ahead of the IPO __ hit a peak of $42.95 Tuesday in the first few minutes of trading on the Nasdaq stock exchange. They finished the day up 12.3% at $33.70, giving the company a market value of more than $11 billion.
At Instacart's San Francisco headquarters, CEO Fidji Simo and other executives celebrated the IPO by ringing a bell shaped like the company's carrot logo. Around 1,000 employees attended, the company said. Instacart’s shares are trading under the ticker symbol “CART.”
The IPO is a long-awaited step for Instacart, which was founded in 2012. The company filed privately for an IPO in May 2022 but delayed those plans last fall when the markets were roiling due to recession fears. There were just 71 IPOs in the U.S. last year, the lowest number since 2009, according to Renaissance Capital.
But a resurgent market is seeing more IPO activity this year. Last week, shares of U.K. chip maker Arm Holdings rose almost 25% in their stock market debut on the Nasdaq, the largest IPO in nearly two years.
Joe Endoso, President at Linqto, an investment platform, said a successful listing by Instacart could prod others __ especially tech companies __ to consider IPOs in the coming months.
“The global financial markets are buzzing with optimism for a potential resurgence in the IPO market,” he said.
Instacart raised $660 million in its initial public offering, selling 22 million shares at $30 apiece. The pricing of the IPO gave Instacart a market value of around $10 billion, significantly lower than the $39 billion value placed on it after a fund-raising round in 2021.
Instacart provides delivery and pickup from 85% of U.S. grocers, or more than 80,000 stores, using a network of 600,000 freelance shoppers. It also provides in-store technology, like smart carts and electronic shelf tags, and sells online ads to food companies and retailers.
It says it has 7.7 million active customers who spend about $317 per month on the platform.
In a letter to investors earlier this month, said grocery delivery has tremendous potential. The U.S. grocery market is a $1.1. trillion industry, but only 12% of sales are made online. She said she expects that to at least double over time.
“We have demonstrated our ability to help our retail partners drive strong growth and stay competitive in a complex and increasingly digital industry,” wrote Simo, a former Facebook executive who became Instacart’s CEO in 2021. Simo grew up in France and is the daughter and granddaughter of fishermen.
The grocery delivery market boomed early in the pandemic. Growth has stabilized, but the market is still about four times larger than it was in 2019, said David Bishop, a partner and lead researcher with Brick Meets Click, a consulting firm that specializes in online grocery shopping.
That market is also increasingly competitive. Instacart faces growing pressure from companies including Uber Eats and DoorDash, which both began delivering groceries in 2020.
As of August, Instacart controlled 70% of the third-party U.S. grocery delivery market, according to YipitData, a market research firm. DoorDash controls around 10%. This week, DoorDash added more U.S. grocers to its offerings, including Cub, Lowe’s Markets and Eataly.
Instacart also faces pressure from grocers themselves, who sometimes bristle at the higher prices Instacart charges or at the pricing rules it puts in place for grocers using its software to run their own websites.
Instacart orders can cost consumers 15% to 20% more than shopping in stores because of delivery fees and product markups, Bishop said.
Some grocers have unwound partnerships with Instacart or built up their own delivery capability. H-E-B, a Texas chain, encourages customers to shop on its own site, not Instacart’s, if they want lower-cost delivery, Bishop said. Other big grocers, like Walmart and Target, also do their own deliveries.
Bishop said Instacart needs to keep its customers coming back because it relies on them to sell ads.
“It's increasingly difficult to see how Instacart can do that as its competitors are expanding into grocery and grocers are looking more closely at how they can improve the profitability of selling online," he said.
Food price inflation over the last two years has also dampened demand for delivery in favor of curbside pickup, which is less expensive. U.S. grocery pickup orders grew 3% to $10.5 billion in the April-June period this year compared to the same period a year ago, Bishop said. Grocery delivery orders grew just 1% to $7.8 billion.
Instacart’s orders also slowed in the first half of this year after growing 18% between 2021 and 2022, the company said in its IPO filing.
Still, Instacart’s revenue was up 31% to $1.47 million in the first six months of this year, largely due to increases in the advertising fees it collects from retailers and food companies. The company reported net income of $242 million in the first six months of this year.
Among those bullish about Instacart's prospects is PepsiCo, which agreed to buy $175 million in convertible preferred stock in a private placement.
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