Instacart files its long-awaited IPO plans, with PepsiCo as big backer

Instacart late Friday filed a registration statement with the U.S. Securities and Exchange Commission for a long-awaited initial public offering, capping more than a year of on again-off again speculation.

The San Francisco-based last-mile delivery company said in a statement that it intends to list its common stock on the Nasdaq Global Select Market under the ticker symbol CART. 

Instacart said it has not yet been determined how many shares will be offered or the per-share price, but PepsiCo., Inc. has agreed to purchase $175 million of Instacart's Series A preferred stock, according to the company’s prospectus.  

Instacart CEO Fidji Simo said in the filing: "As I write this, a massive digital transformation is underway in the grocery industry. Grocery is the largest retail category and represents a $1.1 trillion industry in the United States alone. But only 12% of grocery sales are made online today. As even more people shop online, online penetration could double or more over time."

Simo added that while Instacart works with thousands of companies, it is positioned to help smaller retailers keep up in an increasingly tech-driven industry. "Retailers understand that we invest more in technology custom-built for online grocery than any single grocer could—and that by partnering with Instacart, they can have the same technology edge as tech giants and startups, while also being able to focus on everything else it takes to run a successful business," Simo wrote. 

Related:Report: Instacart nears launch of IPO

She noted that Instacart works with more than 1,400 retail banners of all sizes and more than 80,000 stores. That represents more than 85% of the U.S. grocery market, she added. 

"Millions of households depend on us and our partners for their grocery needs. We power tens of billions of dollars in annual sales for retailers, which makes Instacart the leading grocery technology company in North America," Simo noted. "Our GTV (gross transaction value), representing the online sales we power for all of our retail partners, grew at a compound annual growth rate of 80% between 2018 and 2022, compared to 50% for the overall online grocery market and 1% for offline grocery."

The prospectus further noted that Instacart's gross transaction volume, or the total dollar amount processed through its platform, grew from $24.9 billion in 2021 to $28.8 billion in 2022 and $14.9 billion for the first six months of 2023. 

The company also reported that it generated operating cash flow of $242 million in the first half of 2023, compared to $99 million over the same period a year prior. 

"Our strong and growing cash position enables us to offer cash alternatives to employees while allowing us to optimize our decisions to minimize dilution," the prospectus noted.

The announcement comes one week after Bloomberg reported that Instacart could file paperwork with the SEC as early as September. 

The IPO is a long time coming for the company that's seen its valuation rise and fall by billions of dollars over the last year and a half. Instacart was reportedly valued at about $40 billion in March 2022 but had plummeted to $10 billion by the end of the year. 

The company made an earlier attempt at an IPO, confidentially filing paperwork with the SEC in May 2022, but Simo reversed course in October, saying that the market was too volatile.

Instacart has chosen Goldman Sachs & Co. LLC and J.P. Morgan Chase to serve as the lead book-running managers, while BofA Securities, Barclays and Citigroup will assist. Instacart announced that co-managers include Baird, JMP Securities, A Citizens Company, LionTree, Oppenheimer & Co., Piper Sandler, SoFi, Stifel, Blaylock Van, LLC, Drexel Hamilton, Loop Capital Markets, R. Seelaus & Co., LLC, Ramirez & Co., Inc., Stern and Tigress Financial Partners.