Instacart, the food delivery company, is pulling its plans to go public in 2022, in the latest sign of turmoil in the public markets, three people with knowledge of the situation said.
The company had been one of the few tech firms seeking to go public this year, as investors all but shut their doors to putting their cash in initial public offerings of unprofitable entities. Wall Street, spooked by rising inflation, the war in Ukraine and fears of a recession, has preferred putting cash into safer bets.
Instacart filed papers this year for a so-called confidential filing, which meant it did not yet have to disclose certain data about its business. The filing did not require Instacart to follow through with a public offering, but it was considered a big step toward one. The company had planned to make its financial information public this week, starting the official process, said two of the people with knowledge of the matter, who declined to be identified because the discussions are confidential. But amid market jitters, the plans were halted, they said.
Instacart is not withdrawing its filing and is awaiting more favorable market conditions to go public, one person said. Yet the window for going public this year is quickly shutting. Bankers prefer not to take companies public over the holidays, and the company is running out of time.
A representative for Instacart said the company was “incredibly proud of the work our teams are doing to power the future of grocery with our retail partners, and our business has never been stronger.” Without revealing specific figures, she added that Instacart’s revenue in the third quarter grew more than 40 percent from a year earlier and that its net income more than doubled from the previous quarter.
Our Coverage of the Investment World
The decline of the stock and bond markets this year has been painful, and it remains difficult to predict what is in store for the future.
- Navigating Uncertainty: There seems to be growing acceptance that some kind of a recession might be coming. Here is how investors should approach the situation.
- A Bad Year for Bonds: This has been the most devastating time for bonds since at least 1926 — and maybe in centuries. But much of the damage is already behind us.
- Weathering the Storm: The rout in the stock and bond markets has been especially rough on people paying for college, retirement or a new home. Here is some advice.
- College Savings: As the stock and bond markets wobble, 529 plans are taking a tumble. What’s a family to do? There’s no one-size-fits-all answer, but you have options.
“We remain focused on building for the long term, and we are excited about the opportunity ahead,” she said.
Instacart, which was founded in 2012, pairs people at home ordering groceries on its app with shoppers who work as independent contractors for the company. The contractors pick someone’s groceries and then deliver them.
Instacart’s founder and chief executive, Apoorva Mehta, was replaced last year by a former Facebook executive, Fidji Simo. Mr. Mehta stayed on as chairman of the board. The company’s investors include Andreessen Horowitz, Sequoia Capital and D1 Capital Partners.
Instacart’s revenue surged as Covid-19 cases climbed at the beginning of the pandemic and people preferred to not go to stores for safety reasons. But that acceleration dropped off in the second quarter of 2021 as more people were vaccinated and returned to their regular shopping habits.
In March, the company slashed its internal valuation to $24 billion from $40 billion. “We are confident in the strength of our business, but we are not immune to the market turbulence that has impacted leading technology companies both public and private,” Instacart said at the time.
Last week, Instacart cut its internal valuation further to $13 billion, said a person with knowledge of the matter. The Information earlier reported the new valuation.
It has been a rocky year for public offerings. The pace of I.P.O.s in the first half of this year was the slowest since 2009, according to data from Dealogic. Many of the companies that have gone public over the past two years have also struggled. Shares of DoorDash, the food delivery company that went public in 2020, have since fallen 74 percent.
The dearth in public offerings has also cut into the revenue of some of Wall Street’s biggest banks.
Erin Griffith and Kellen Browning contributed reporting.