Apoorva Mehta, a co-founder of Instacart, has decided to step away from the startup after reaping a substantial USD 1.1 billion windfall from its IPO launch. Notably, he will remain the company's largest shareholder. Mehta had previously served as the CEO of Instacart until his resignation in August 2021.
He later took on the role of executive chairman as part of the IPO process. However, he has now handed over all his responsibilities to the current CEO, Fidji Simo, who previously worked at Meta Platforms.
Instacart, founded in 2012, has undergone a remarkable transformation, evolving from a Webvan clone to become the largest grocery delivery business in the United States. At its peak in March 2021, following a pandemic-induced boost, the company commanded a valuation of USD 39 billion, as assessed by venture capitalists. Nevertheless, the firm faced increasing challenges due to rising inflation, prompting it to lower its internal valuation on three occasions in the course of last year. By October, the company's valuation had been reduced to approximately USD 13 billion.
The journey of Instacart's IPO proved to be a rollercoaster ride. On Monday, the company priced its IPO at USD 30 per share, resulting in a valuation of USD 9.9 billion. The IPO launch day witnessed Instacart's shares surging by more than 40 per cent as they commenced trading in New York. However, on just the second day of trading, the grocery delivery firm saw its stock dip below the IPO price, underscoring the challenge it faces in convincing investors of its plans to expand into the advertising and grocery software sectors.
Instacart, officially known as Maplebear Inc., experienced an 11 per cent decline in its share price, closing at USD 30.10. At one point during the final hour of trading, it slipped as low as USD 29.96, falling beneath the USD 30 threshold at which shares were initially sold during the IPO. While shares had initially soared by as much as 43 per cent on the first day of trading, they later retraced and closed with a 12 per cent gain.
Throughout this IPO journey, Apoorva Mehta maintained his focus on the long-term prospects of Instacart. In a telephone interview following the stock's debut, he stressed the company's emphasis on its performance over the coming years rather than its immediate market performance, stating, "What matters is how Instacart performs over the next few years, rather than what it means on day one." This perspective highlights the company's commitment to its long-term growth and success.