- 16 May 2022
- Transport / Logistics Services
In an attempt to raise funds, struggling US grocery delivery giant Instacart has filed a draft registration statement with the the US Securities Exchange Commission (SEC) ahead of an initial public offering (IPO) of shares.
While Instacart was valued at US$39 billion (£31.87 billion) in March 2021 with a funding round of $265m (£216.5m), it has since radically downgraded its valuation to $24bn (£19.6bn) as technology share prices fall across the board. The NASDAQ index has tumbled nearly 30% from last year’s high in November.
Instacart benefitted from the lockdowns of 2020-21 but as business receded when people were allowed to shop and eat in physical locations. To add to the headwinds, inflation is set to grow as are higher interest rates as US authorities attempt to tackle the problem. Risky assets such as grocery delivery business shares are being divested by investors. This could mean trouble for Instacart and other rivals like Deliveroo.
As with all companies in this space, Instacart says it is on course for profitability, as it makes plans to move into the 15-minute delivery space. This could prove riskier still with large companies in this space struggling even to break even and none making a profit.