Bloomberg: IPOX® CEO Josef Schuster on Instacart's IPO
IPOX® CEO Josef Schuster was interviewed by Bloomberg on the upcoming listing of online grocery delivery platform Instacart. Schuster emphasized the delicate balance the company must strike between achieving a robust valuation and satisfying initial shareholders. He estimated the company's worth to be in the $12 to $15 billion range, with probably 9% or 10% of the company being sold, while also highlighting the need to leave some money on the table to stimulate demand for the stock.
The impending IPO of Instacart has garnered widespread attention, particularly because it will be one of the first significant IPOs by a venture capital-backed technology firm in recent months, and it comes at a time when the company has achieved five consecutive quarters of profitability. However, the company's valuation has been a subject of debate. Bloomberg Intelligence analysts, Mandeep Singh and Damian Reimertz, estimated Instacart's worth at around $10.3 billion based on its 2022 revenue of $2.55 billion, which is significantly lower than its peak private valuation of $39 billion. Despite this, there has been considerable interest from cornerstone investors, including PepsiCo Inc., Norges Bank, and entities affiliated with TCV, Sequoia Capital, and D1 Capital Partners, who have indicated an interest to buy up to $400 million in stock.
Schuster's comments highlight the challenges faced by Instacart as it prepares for its IPO, amid concerns of stagnating order growth and increased competition from rivals such as Walmart, Uber, and DoorDash. The interview underscores the broader challenges faced by gig-economy companies in achieving profitable growth while navigating a highly competitive market landscape.
