|
The
move by San Francisco-based Instacart comes at a time capital
markets investors, hit by heavy losses from 2021 listings, are
shunning initial public offerings (IPOs), and equity markets are
bleeding in anticipation of further aggressive U.S. interest
rate hikes to tame inflation.
A selloff in global markets following Russia's invasion of
Ukraine in February and subsequent Western sanctions has made
matters worse, forcing many companies to put their U.S. listing
plans on hold. Eye-care company Bausch + Lomb last week priced
its IPO well below its targeted range.
The tepid reception for recent listings underlines the
challenges facing IPO-bound social media platform Reddit, U.S.
software startup ServiceTitan and Mobileye, the self-driving car
unit of Intel Corp.
Instacart, which counts Andreessen Horowitz and Sequoia Capital
among its investors, did not disclose any details on the size
and timing of its market debut in the statement on Wednesday.
The grocery delivery firm is considering going public through
either a direct listing or a traditional IPO, according to
people familiar with the matter.
In direct listing, no shares are sold in advance, as is the case
with IPOs. It also allows insiders to sell their shares
immediately rather than be restricted for months, as is the case
with IPOs.
Goldman Sachs and JPMorgan are working on Instacart's offering,
a person familiar with the talks told Reuters. The banks
declined to comment on the matter.
SLASHED VALUATION
Instacart cut its valuation to $24 billion in March, a
substantial drop from $39 billion a year earlier when the
coronavirus pandemic was raging and doorstep delivery boomed.
The company has been under pressure from not only rival delivery
upstarts, but also traditional retailers who are trying to grab
market share in the space.
While retail giants Walmart Inc and Target Corp have been
pouring money into fast delivery options, DoorDash recently
acquired Finland-based rival Wolt to expand its footprint.
SoftBank-backed delivery startup GoPuff, which has been raising
more capital, has tapped top U.S. banks to gear up for a U.S.
IPO. It grew its valuation nearly four-fold in less than a year
to $15 billion in July last year.
(Reporting by Noor Zainab Hussain, Akriti Sharma and Tanvi Mehta
in Bengaluru, additional reporting by Deborah Sophia, Juby Babu
and Shivani Jayesh Tanna; Editing by Sherry Jacob-Phillips and
Shinjini Ganguli)
[© 2022 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
