Benzinga - by AJ Fabino, Benzinga Staff Writer.
Instacart is set to debut on the Nasdaq under the symbol "CART" Tuesday following the announcement of its initial public offering (IPO) price at $30 per share.
The IPO, totaling 22 million shares, includes 14.1 million being sold by Instacart and 7.9 million by particular selling shareholders.
Current indications point to Instacart opening trade at $42, up from the $30 IPO.
With a growth of about 590% in sales during 2020, driven largely by the pandemic, Instacart's move to go public comes after several years of anticipation. The company's valuation had previously soared to $39 billion in its latest funding round.
Instacart's CEO Fidji Simo discussed the company's performance and future plans in a CNBC interview Tuesday.
Addressing competition, particularly from gig economy platforms like Uber Technologies Inc (NYSE: UBER) and DoorDash Inc (NYSE: DASH), Simo spoke to the fundamental differences in the markets of restaurant and grocery delivery. Instacart's deep integration with grocers — representing 85% of the industry — gives it a significant competitive edge.
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Simo added that Instacart is an enabler for retailers, rather than a competitor, setting them apart from platforms like DoorDash.
Regarding the possibility of Instacart building its own grocery business in the future, similar to DoorDash’s “DashMart,” Simo reaffirmed the company’s long-term position against the move, citing Instacart’s vast supply and selection through its grocers.
She said deep integration, paired with new AI-enhanced inventory insights, are the primary factors behind Instacart's superior customer experience.
While Instacart is widely recognized for its grocery delivery, the advertising segment of the business is getting some attention in relation to the IPO. Accounting for nearly 30% of the total revenue, the high-margin, rapidly-growing sector is providing significant value to Instacart.
Simo confirmed that advertising operates in harmony with their retail partners, bringing them incremental customers.
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