Source: Beast Finance Author: Beast Finance
Beast Finance learned that Instacart, a grocery delivery service company, has recently submitted a prospectus to the US Securities and Exchange Commission (SEC) to apply for listing on the Nasdaq IPO with the stock code (CART). Instacart plans to go public through this Nasdaq IPO Raised $100 million in funding.
Company Profile
Instacart, headquartered in San Francisco, California, is a company that provides online grocery order IT system integration services for grocery stores in the United States and Canada.
The company currently works with more than 1,400 grocery chains and independent grocery stores across the United States.
Instacart management is led by President and CEO Fidji Simo, who has been with the company since 2021 and, before that, was head of Meta's Facebook app and eBay's strategy manager.
As of June 30, 2023, Instacart had raised $3.75 billion from investors including Sequoia Capital and D1 Capital Partners.
Industry overview
According to a 2022 market research report by Grand View Research, the size of the global online grocery buying market is estimated at $286 billion in 2021 and is expected to reach $2.18 trillion by 2030.
This means that the industry will grow at a staggering 25.3% CAGR from 2022 to 2030.
The main drivers of this expected growth are changing consumer buying preferences, improvements in fulfillment technology, and reliability of last-mile delivery.
Moreover, the following image is a pie chart of the global online grocery market by product type in 2021:
Instacart's main competitors in this industry are:
（1）Veeve
（2）Criteo
（3）Quotient
(4) Amazon (AMZN)
(5) Target (TGT)
(6) Walmart (WMT)
（7）Uber
（8）Blue Apron
（9）Misfits Market
（10）Fresh Direct
（11）Can
（12）Gopuff
（13）DoorDash （DASH）
financial situation
According to the IPO prospectus, Boldbeast Finance sorts out Instacart’s financial performance as follows:
(1) Total revenue: Instacart's total revenue in 2021, 2022 and as of June 30, 2023 are: US$1,834,000,000, US$2,551,000,000, and US$1,475,000,000, respectively.
(2) Gross profit (loss): Instacart's gross profit in 2021, 2022 and as of June 30, 2023 are: $1,226,000,000, $1,831,000,000, and $1,109,000,000, respectively.
(3) Gross profit margin: Instacart's gross profit margins in 2021, 2022 and as of June 30, 2023 are: 66.85%, 71.78%, and 75.19%, respectively.
(4) Operating profit (loss): Instacart's operating profit in 2021, 2022 and as of June 30, 2023 are: $73,000,000, $97,000,000, and $27,000,000, respectively.
(5) Operating cash flow: Instacart's operating cash flow in 2021, 2022 and as of June 30, 2023 are: $204,000,000, $277,000,000, and $242,000,000, respectively.
As of June 30, 2023, Instacart had $1.96 billion in cash and $774 million in total liabilities.
For the 12 months ending June 30, 2023, Instacart's free cash flow was $387 million.
IPO details
According to the IPO prospectus, Boldbeast Finance organizes Instacart’s IPO situation as follows:
Instacart plans to raise $100 million through the Nasdaq IPO.
Potential new shareholder PepsiCo has agreed to buy up to $175 million of Instacart's Class A common stock at the IPO price.
With regard to outstanding legal action, the company has amassed a $65 million balance in legal reserves related to the possibility of failure of a California lawsuit "alleging unfair competition claims related to contractor misclassification" or a "San Diego lawsuit." The company has since settled with the city for $46.5 million, pending the outcome of a challenge to Proposition 22 over the classification of "gig workers."
The company is also the subject of other "putative" class actions related to the same contractor classification issue.
If the Company loses in these putative class actions, it could increase the Company's costs and could have a material adverse effect on its financial condition and operations and result in efforts by "gig workers" previously classified as "gig workers" to unionize.
Instacart currently plans to pay no dividends and retain future earnings, if any, primarily to reinvest in the company's growth plans and working capital needs.
Goldman Sachs, JP Morgan, BofA Securities and other investment banks are the bookrunners for Instacart's Nasdaq IPO.
Agency
Monster Finance learned from Instacart’s IPO prospectus that Goldman Sachs is the lead underwriter for Instacart’s Nasdaq IPO listing. In the past 12 months, the average return rate of the 8 IPOs led by Goldman Sachs since listing was 14.1. %. This was a middling performance among all major underwriters during the period.
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