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A source has clarified that the company does not rule out the possibility of going public this year, however, it is unlikely.
Earlier this year, Grocery delivery app Instacart filed for a confidential Initial Public Offering (IPO) with the US Securities and Exchange Commission (SEC). Following the current volatility in the stock market, Instacart has decided to push the much-anticipated IPO to 2023. This comes as a little surprise as the company was expected a couple of weeks ago to launch the event. A source also clarified that the company does not rule out the possibility of going public this year, however, it is unlikely.
Though Instacart refused to comment on its IPO plans and their postponement to 2023, it disclosed that some growth was recorded in its quarterly report.
“We are incredibly proud of the work our teams are doing to power the future of grocery with our retail partners, and our business has never been stronger,” wrote the company. “In Q3, our revenue grew more than 40% year-over-year, and our Net Income and Adjusted EBITDA more than doubled from Q2. We remain focused on building for the long-term, and we are excited about the opportunity ahead,” Instacart added.
Instacart was severely affected by the pandemic and was forced to lay off staff out of its 3,000-strong workforce, slow down hiring and reduce certain expenses. The company was reportedly seeking to go public through a direct listing or traditional IPO. It is worth noting that no shares are sold in advance in the direct listing. As is the case with IPOs, it allows insiders to sell their shares immediately instead of waiting for months.
According to Renaissance Capital, only 65 companies went public on US exchanges this year. This is said to be an 80.7% decline from last year. In addition, US IPO proceeds saw a 94.1% decline. This is said to be a global challenge as the tech IPO industry is said to be in its worst drought in nearly two decades. Data from Dealogic disclose that US listings have so far raised over $7 billion this year. Comparatively, traditional IPOs raised a record $154 billion last year. This excludes special-purpose acquisition companies.
The past couple of years have been very tough for companies who had to endure global pandemics, go through the crypto winters and deal with the interest rate hikes meant to control the rising inflation.