Instacart reported a surge in sales and profits in the fourth quarter of 2022, per The Wall Street Journal, an optimistic sign as the company prepares to go public.
The grocery delivery company’s revenues rose more than 50% year-over-year (YoY) in Q4, while gross profits grew by more than 80%.
FY revenues rose 39% to approximately $2.5 billion, and Instacart processed $29 billion in gross transaction volumes, roughly 16% more YoY.
Instacart‘s success is largely due to its push into advertising, as well as growth for its Instacart+ membership program.
While the company’s growth has slowed recently, consumers continue to buy more groceries online than before the pandemic. US digital grocery sales grew by 15.8% in 2022, per our forecast, and will grow another 14.8% this year.
Over the past year, Instacart added more stores to its platform and began allowing food stamp payments, broadening its appeal to consumers.
The company also announced initiatives including Instacart Business, its B2B marketplace offering, and Instacart Health, which aims to address food insecurity and expand access to healthy options. Later this year, Instacart plans to roll out a chatbot powered by ChatGPT (by OpenAI) to answer food-related questions and help shoppers find products, per The Wall Street Journal.
The strength of Instacart’s advertising business coupled with steady growth for its delivery arm should smooth its path to an IPO. However, its decision to cut its internal valuation earlier this year suggests it may have some more convincing to do before investors are fully on board.
And what are your thoughts on the upcoming Instacart IPO?