Grocery delivery company Instacart has decided to test the waters with an initial public offering, a potential bellwether event given the steep drop in technology stocks and with markets in correction. The Instacart IPO might occur later this year.
The IPO, if it occurs, could encourage other technology startups to also submit confidential filings. The IPO market has been weak throughout 2021, due to economic concerns along with Russia's invasion of Ukraine, inflation and supply-chain issues.
According to a statement late Wednesday, Instacart confidentially submitted a draft registration statement with the Securities and Exchange Commission.
A confidential filing means the company does not have to disclose certain financial data while the SEC reviews and approves the filing to go public. The Instacart IPO filing also can be withdrawn at any time.
In March, the San Francisco-based company slashed its valuation to $24 billion, from $40 billion.
Instacart IPO: Acquisition Talks With Rivals
Instacart reportedly held conversations with DoorDash and Uber last year. The subject was about a potential acquisition of Instacart.
Overall online grocery sales fell 3.8% in April from the year-ago period to $8 billion. Order volume dropped 5.8%, according to research firm Brick Meets Click. This includes grocery delivery to the home and store pickup. The data suggest people are less concerned about Covid-19 and more concerned about inflation, it said.
In addition to Instacart, DoorDash and Uber, other providers of online food delivery services include Postmates and Grubhub, which was acquired last year by Amsterdam-based Just Eat Takeaway
The underwriters for the Instacart IPO include Goldman Sachs and JPMorgan Chase
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
