A boom fueled by groceries, but not onlyInstaCart started off as a startup company offering on-demand delivery services. Its success expanded the market and paved the way for other players in the segment, such as DoorDash and Uber Eats. As app downloads' figures suggest, IntaCart experienced exceptional growth with the coronavirus pandemic outbreak in 2020. The lockdown measures enforced in March 2020 contributed to its outstanding sales in the U.S., both for perishables and personal care products.
The first months of the health emergency crisis ended with a totally changed, more competitive market, powered by increasingly demanding consumers. This could explain, at least in part, the gap between brand awareness and loyalty – implying regular usage – of InstaCart services among U.S. consumers.
A promising yet uncertain futureAfter the spike experienced in 2020, InstaCart’s grocery sales are expected to keep growing, but at a slower pace. By 2025, its projections in terms of gross merchandise value lie far behind DoorDash, whose platform could double InstaCart’s business in volume. In recent years, the company has tried to diversify its revenue sources by launching a new advertising and fulfillment platform for retailers and brands, which gives them access to useful insights and allows them to advertise and promote products on its marketplace. By doing so, InstaCart slightly moves from the delivery world, while still at its core, towards the enterprise tech services environment.
Considering the expected financial performance and the recently diversified business strategy, the latest corporate developments do not come as a surprise. At the beginning of 2022, as the stay-at-home investment fever dwindled, InstaCart reduced its market valuation by almost 40 percent. Following the achievement of impressive funding rounds over the previous months, speculations arose regarding a possible initial public offering (IPO), as InstaCart remains a private company. CEO Fidji Simo has expressed that an IPO is the company’s ultimate goal, though they are not in a rush to get there.