Instacart Confidentially Files for IPO - Why Now?

It's difficult to follow the Instacart bouncing ball. In short, the company is troubled. It really went from a perfect storm of growth (people can't visit stores in person), to a perfect storm of inflation (the company is affected by its workers and grocer's ever-rising costs).

The transition from the founder to Fidji Simo was questionable in even the kindest of interpretations, after a series of missteps with the misuse of VC funds, IP patent grabs, and failed acquisitions.

Meanwhile, Walmart is executing quite well in online grocery, Target continues its investment in grocery as well, and chains like Kroger and Albertson's continue to grow their digital capabilities -- even if it's been a winding road for them, too.

Nov 2020:

Goldman was reported to be tapped for an IPO at $30B valuation. Didn't materialize.

Nov 2021:

Fidji Simo says we aren't going public now, instead next year or later.

March 2022:

Fidji Simo "we aren't going public now, we are building the company."

oh hi, valuation cut to $24B from 39B. Instacart says it has $1B cash on hand.

May 2022:

Instacart confidentially files for IPO.

Why file confidentially? Ultimately it gives the company more flexibility because there is no "set date" for IPO, it keeps the company's financials under wraps from competition and the press (particularly if there is bad news hidden in there), and still gives financial analysis several weeks before the IPO to evaluate the financials publicly.

Why file at all? The short answer is shareholders are getting restless and Fidji Simo may likely exit the business shortly thereafter. She was hired as a good name to clean up the issues from the Founder previously, but as an ad exec, she is not enough grocery operator to lead the company to the future.

It is possible the company gets acquired, but I would say the valuation needs to go down further, and who are the targets?

My bet would be on Walmart. It's possible Walmart could use it to strengthen its GoLocal offering similar to Target's previous acquisition of Shipt... plus accelerate its advertising offering.