Instacart’s remarkable debut on the stock market (Nasdaq), with its shares soaring 40% above the opening price, is sending ripples of optimism through India’s burgeoning technology companies, whether they are already listed or have aspirations of going public.
Despite the unique differences in their operating landscapes, Instacart’s triumphant listing underscores the potential for Indian internet-first delivery firms to achieve profitability. According to Kranthi Bathini, the Director of Equity Strategy at WealthMills Securities pvt Ltd, this success story sets an example for Indian startups to prioritize cost control and sustainable business models.
Nandini Mansinghka, the CEO of Mumbai Angels, views this trend as a sign of market maturity and the growing openness of investors in public markets to newer, growth-stage companies. She further states that the increasing number of startups choosing IPOs signifies their confidence in strong business models that eventually lead to profitability.
Companies like Zomato, Paytm, and Nykaa, which recently faced stock price corrections ranging from 50% to 60% from their all-time highs, are now focusing on margin expansion rather than revenue growth. According to Bathini, these firms are shifting their strategies to achieve profitability and sustainability.
Among the companies poised to benefit from the Instacart success story are Swiggy and Zepto, both in the queue for IPOs and backed by U.S.-based investors. Bathini emphasizes that the new-age startups have already demonstrated their commitment to moving towards profitability.
Somdutta Singh, an angel investor and founder of Assiduus sees valuable insights and lessons from Instacart for Indian companies. While India’s market dynamics may differ, Singh notes key takeaways such as diversification and leveraging data analytics and AI for operational optimization.
Instacart has successfully expanded into additional categories like pharmacy, alcohol, and convenience items. Singh believes that Indian counterparts like Swiggy and Zepto can explore diversification and invest in data analytics and AI to enhance customer experiences and streamline logistics.
Another crucial aspect is Instacart’s gig economy model for shoppers, which provides flexibility and scalability. Indian firms can consider similar approaches to manage delivery costs effectively, according to Singh.
Instacart’s IPO success could validate similar business models and inspire innovative solutions in the Indian market.