Instacart's bells and whistles beg the question: 'What is Instacart?'

It’s been a turbulent couple of weeks for San Francisco-based tech company Instacart, which went public on Sept. 20, opening at $42 per share and dropping to as low as $26.10 on Wednesday.  

With IPOs at a virtual standstill this year—a mere 121 companies have gone public in 2023, compared to the record-breaking 1,035 in 2021—the hope that Instacart going public would help to encourage others to do the same might be just wishful thinking at this point.

Only eight companies have begun trading since Instacart’s debut, and the grocery tech firm’s mediocre performance isn’t helping much with investor confidence. 

The last-mile delivery service faces skepticism from Wall Street analysts, primarily due to its flattened customer base and the competition it faces in practically every part of its business. Instacart must not only outperform competitors like DoorDash and UberEats, but it also must keep its lucrative ad revenue growing.  

In the first half of the year, the company’s ad sales of $406 million made up more than a quarter (28%) of its revenue, which is cause for concern as Instacart competes with its grocery store partners for those dollars.  

One of the big questions it has to answer is: “What exactly is Instacart? A delivery service? An advertising company? A tech company? All of the above?” It depends on who you ask. Instacart would prefer to be considered a tech company, and it shows through the flurry of new technology it has released over the last year. 

In a partnership with ChatGPT, the company released its “Ask Instacart” function, which enables customers to ask questions in a more conversational manner, such as “What is a good low-calorie lunch for kids?” just before going public. It also recently launched its newest smart shopping cart technology, known as Caper Carts. At the annual Groceryshop convention in Las Vegas in September, the company announced the release of its in-store mode function, which allows Instacart users to plan in-store trips to grocers that use Instacart’s mobile app platform. 

In August, it released Instacart Storefront tech, enabling stores that use its e-commerce platform to create custom digital campaigns and landing pages.

Instacart also expanded its movement into pharmacy with the announcement Tuesday that it will be partnering with Alignment Healthcare and InComm Payments in 2024 on a Medicare Advantage plan that gives participants Instacart grocery benefits such as quarterly grocery allowances and free Instacart memberships. 

On Wednesday, Instacart announced it has secured another healthcare partner in Mount Sinai Solutions, a division of Mount Sinai Health System. The delivery service will provide Instacart Health Fresh Funds stipends through the healthcare provider for pos-operative and post-partum patients.  

"The new program is designed to alleviate challenges to accessing fresh groceries, pantry staples and household essentials following a major life event, such as a joint replacement, birth or bariatric surgery,” the company said in a press release.  

What this all means for Instacart and its investors is still unclear, but as the company piles on with new tech and moves into more segments of the economy, it seems increasingly difficult to define the question many are already asking: “What is Instacart?”