instacart ipo

Investing in Instacart IPO: Your Ultimate Guide to Profits

Instacart has filed for its IPO and could debut this month and it will be one of the biggest IPOs of this year. Make informed decision before investing in Instacart IPO.

Table of Contents

What does Instacart do?

Instacart is a delivery platform facilitating the delivery of groceries from shoppers to buyers within hours of an order. It was founded in 2012 and has grown to be one of the leaders in grocery delivery with over 500 partner companies across the U.S. and Canada. Before investing in Instacart IPO you must go through financials of the company.

Financials of Instacart

Let us have a look at the financial parameters of Instacart like cash flow, profitability, growth of sales and consumer base, and its partners. Annual revenue is increasing from $1500mm in 2020 to $1800mm in 2021 to $2500mm in 2022, with the consumer base rising from 3.3 million to 13.7 million (almost 300 % growth in the last five years) which is a good sign. Instacart’s management has surely made a mark in the digital grocery delivery space.

Top management of Instacart

Fidji Simo has been the CEO since August 2021. Asha Sharma is the Chief Operating Officer and Varouj Chitilian is the Chief Technical Officer of the company.

How capable is the management team of Instacart?

The management team is capable enough as the company has managed to generate $240 million in the first half of 2023 and managed to come out of the $74 million loss for the same time period a year ago.

Expectations from Instacart IPO

Now we try to understand its valuation and how much money the company wants to raise from IPO. After IPO, Instacart will trade under the ticker “CART” in NASDAQ. The company is aiming to sell 22 million shares at a price between 26$ and 28$ per share valuing around $7.4 billion and raising $600 million.

Previous growth record and projection

It is extremely important to assess previous sales, profits, and growth of revenue to understand the potential of a company. Grocery delivery businesses have projected revenue of $182bn in 2023 and are expected to grow at a CAGR of 18.8% for the next 5 years. Instacart is among the top 5 leaders in North America. As per the Mordor Intelligence report North American online grocery delivery market is highly competitive market without dominance. Thus, there is a lot of scope for the company to grow.

Should you consider investing in Instacart IPO?

Investors can consider investing in Instacart because of its continuous growth record, good management, and a recent last year’s correction in valuation. The company also has the scope to grow as an advertising company. If the company manages to maintain its momentum, then it has a solid future because of a huge addressable market.

RED FLAGS: Flat gross transaction value and small retail base

GREEN FLAGS: Growth and revenue from advertisements

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