Instacart disclosed a major investment from PepsiCo, as the grocery delivery service made public its filing for a long-awaited stock market launch.
The San Francisco-based last-mile delivery company filed a registration statement with U.S. Securities and Exchange Commission for an initial public offering (IPO), with PepsiCo agreeing to buy $175 million in preferred convertible stock. The company has been in talks of possibly going public since May of 2022.
The move for PepsiCo comes as digital transformation is underway in brands alike, retailers, third-party platforms and the grocery industry.
“Grocery is the largest retail category and represents a $1.1 trillion industry in the United States alone,” said Instacart CEO Fidji Simo in the filing. “But only 12 percent of grocery sales are made online today. As even more people shop online, online penetration could double or more over time.”
In the prospectus, Instacart cited data from Incisiv that showed the online grocery market will post at an annual compound growth rate of 10 to 18 percent between 2022 and 2025, compared to 0 to 4 percent for offline sales.
Simo added that Instacart works with over 1,400 retail banners of all sizes and more than 80,000 stores. “That represents more than 85 percent of the U.S. grocery market,” she said.
Instacart boots profitability
In the filing, the company offered a look at its financials. It stated that, for the first six months of 2023, revenue increased 31 percent to $1.48 billion. Advertising and other revenue climbed 25 percent to $406 million. The company also reported a net income of $242 million during that period—compared to a $74 million loss a year earlier.
“Starting in March 2020 and through the first quarter of 2022, our growth was significantly accelerated by the COVID-19 pandemic,” the company said in the filing. “While we do not expect our pandemic-accelerated growth rates to recur in future periods, our growth during this period helped establish a business with much greater scale and much higher gross profit.”
Instacart said in a statement that it intends to list its common stock on Nasdaq Global Select Market under the ticker symbol CART—the amount of shares or per-share price is yet to be determined.