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Instacart S-1

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Re: Instacart S-1

#21

Post by tdullien »

jy1 wrote: post #9
calmoo wrote: post #2

Is there a monetary advantage filing for IPO in the current downturn? I know the owners will get less money per share but is there a long term advantage?

According to the S-1: They are paying out about $400m/yr to preferred shared holders, which will be wiped clean on IPO (preferred shares convert to common), allowing the company to retain these earnings. Under "Undistributed earnings attributable to preferred stockholders"

Isn't that unusual for normal venture backed companies? I know preferred shares with high dividends as debt-like instruments for financial companies, but ... are there venture investments that expect dividend payments?

Re: Instacart S-1

#22

Post by octernion »

aeyes wrote: post #16
octernion wrote: post #11

Earlier quoted context omitted.

it’s a solid, profitable & growing business & owners don’t have to sell; the folks that have been waiting a decade for liquidity can

It doesn't look growing to me, order volume has been flat for the last 6 quarters. I'm not sure how much more they can grow per order profit.

yeah, order volume is flat but ad business is growing significantly, and it seems that their primary competitor (doordash) is growing at the expense of shipt and/or amazon, not instacart; and, a lot of the YoY flatness is explained away in the S-1 (up to you if you agree with their logic).

agreed that it seems unlikely they can grow their per order profit but you never know, I guess.

Re: Instacart S-1

#23

Post by hakfoo »

ricardobeat wrote: post #13
drewg123 wrote: post #5

Earlier quoted context omitted.

It also seems like they don't have a lot of competition yet. Maybe the owners want to get their money while they own the market for shopping apps because they see writing on the wall.. I personally think that their UX is so terrible that they'd be eaten alive by anybody with a decent app.

> their UX is so terrible that they'd be eaten alive by anybody with a decent app LastPass, Amazon, Prime Video, Quora, Zoom, Facebook, WhatsApp, Apple Music, Outlook, Steam... that can be said of a dozen other popular apps, but unfortunately it's not that simple.

You'd expect more of these platforms would be all-too-eager to go into the API business.

Their value is what exists on the server side-- the networks, the content, the connections. The app is realistically more of a cost centre for them, and potentially an opportunity for friction or underserved use cases.

Opening the door for third parties would give them opportunities to expand their market for no additional cost.

For example, I could see Instacart integrations into smart-appliance platforms, thus fulfilling the long-wibbled-about premise of "what if your refrigerator knew you were out of eggs and would order more."

Re: Instacart S-1

#24

Post by drinkzima »

bnchrch wrote: post #12

Cool to see a IPO with profitable unit economics > Gross profit grew from $1,226 million in 2021 to $1,831 million in 2022, an increase of 49%, and from $769 million for the six months ended June 30, 2022 to $1,109 million for the six months ended June 30, 2023, an increase of 44%; Unless I missed something

Gross profit is what most people think of as revenue. What they start with after goods and shoppers less COGS.

Re: Instacart S-1

#25

Post by kamikaz1k »

jy1 wrote: post #9
calmoo wrote: post #2

Is there a monetary advantage filing for IPO in the current downturn? I know the owners will get less money per share but is there a long term advantage?

According to the S-1: They are paying out about $400m/yr to preferred shared holders, which will be wiped clean on IPO (preferred shares convert to common), allowing the company to retain these earnings. Under "Undistributed earnings attributable to preferred stockholders"

New to this stuff, but why are they paying anything to these preferred shareholders?

Re: Instacart S-1

#26

Post by 0898 »

What’s this $358 million tax benefit? If it wasn't for that they’d still have made a ~$70m loss. Is that a one-off?

Re: Instacart S-1

#27

Post by jy1 »

kamikaz1k wrote: post #25
jy1 wrote: post #9

Earlier quoted context omitted.

According to the S-1: They are paying out about $400m/yr to preferred shared holders, which will be wiped clean on IPO (preferred shares convert to common), allowing the company to retain these earnings. Under "Undistributed earnings attributable to preferred stockholders"

New to this stuff, but why are they paying anything to these preferred shareholders?

Likely the investors negotiated the terms in return for funding.
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