Online grocery platform Instacart announced last week that it has hired Nick Giovanni, as its new CFO, describing him as spending "more than 20 years at Goldman Sachs where he advised clients on hundreds of financing, strategic and investing transactions, including some of the largest financial transactions and public offerings of the last two decades for companies such as Airbnb, DoorDash, Square, Twitter, Snap, Dropbox, Yelp, Zynga, eBay, Meituan and Baidu, as well as direct listings for Spotify and Slack."
Reuters reported a couple of months ago that "Instacart had picked Goldman Sachs to lead preparations for its IPO, which could come this year and value it at around $30 billion."
The Wall Street Journal writes: "Instacart didn’t make Mr. Giovanni available for an interview and declined to comment on whether it is exploring a public listing. Companies last year raised a record amount of capital through IPOs, despite uncertainty around the coronavirus pandemic and the pace of the economic recovery.
"The pandemic has been a boon for Instacart’s business as consumers purchase more food and home goods online. The venture-backed company, which was founded in 2012, doesn’t disclose financial results."
- KC's View:
If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.
What we have here is a duck - Instacart is planning an IPO, and probably sooner rather than later since, as the Wall Street Journal reported over the holidays, after several years of working with Instacart, "some grocers are starting to question the relationship."
The concern among a growing number of retailers is that a) Instacart controls too much customer information while b) retailers working with it are taking at hit to their already thin margins. The argument here The argument here for quite some time has been that while Instacart's business model makes sense for Instacart, it is a lot less sensible for the retailers with which it does business - it threatens their value proposition, brand equity, customer relationships and even their economics as it siphons off some promotional dollars from manufacturers.
More to the point, Instacart knows all this. If its business is a house of cards, Instacart also may know that there's a stiff wind coming … and so it makes sense to schedule the IPO as soon as possible - while the pandemic is still driving e-grocery, and before enough retailers have gotten wise to the downside to put a crimp in its plans.