- Grocery delivery and pick-up service Instacart has stated that it does not intend to issue new shares in its upcoming initial public offering (IPO), preferring to concentrate on selling employee shares, allowing them to cash out on the shares they have been racking up. The company hopes the move will help it retain talent as employees receive more benefits from their shares and attract new talent by giving them more ownership.
- The stock will be sold to new buyers at a predetermined price before listing on the market. This comes following the company reducing its valuation by 40% due to market conditions in May and registering with the US Securities Commission to go public soon after.
- Ahead of its upcoming IPO, the company has broadened its product offering to entice investors, with the purchase of two startups this month, Rosie and Eversight. Instacart plans to use the company's resources, such as tools for developing websites and mobile apps, advertising tools, and loyalty programs, to offer solutions for smaller grocery stores combined with the pricing and promotions platform.
Why it matters
The company's decision to go public comes at a time when technology companies' IPOs are on the decline, with the 238-day wait since the last big tech IPO over $50M, breaking records set after the 2008 financial crisis and the dot-com collapse.
