Bloomberg News reports that Instacart Inc., the food delivery giant, has stalled plans to go public until next year. This was revealed by individuals that are familiar with the matter. The company had plans to file its S-1 filing in the current week. However, it was reconsidered amidst a tumultuous market, stated people.
The company’s chief executive officer, Fidji Simo, wrote in a memo to staff on Thursday that the market conditions were extraordinarily turbulent, making it highly unlikely that the initial public offering would materialize for Instacart in 2022.
Earlier, the company had curbed its valuation many times to approximately $13 billion and had decided not to go public until there was an improvement in the market conditions.
The startup based in San Francisco, with a valuation of $39 billion estimated by investors, has raised several hundreds of millions of dollars towards venture capital funding. Earlier this year, Instacart tried to go public by filing confidentially.
As far as the timing of the public offering is concerned, the company refused to comment. In a statement, the company said that the company is proud of the work the team is doing and that the company has never been this stronger before.
Bloomberg News reports that Instacart, the largest online grocery delivery firm in the United States, gained immense prominence as more and more people ordered food from home during the pandemic. The company’s valuation has since stumbled, laying off many workers.
In its memo on Thursday, which Bloomberg reviewed, Simo stated that Instacart is planning to extend cash bonuses to the employees since it is unlikely that the company will be able to offer equity liquidity before 2022 ends. The bonus that will be given to the employees will depend on the duration the employee has been serving, his role, and his performance.
Simo also added that she, along with the chief financial officer, Nick Giovanni had meetings with more than 50 potential investors that have shown confidence in the company. However, at the same time, they also believe that during this turmoil in the market, not much support will be received by the new tech IPO companies as of now.
Citing the company’s solid financial position, Simo stressed sales that grew by more than 40% compared to what it was just a year earlier. The gross profit was found to be increasing by 45% and more. Adjusted earnings before interest, depreciation, amortization and taxes doubled from the second quarter, aside from the net income.
