Instacart pulls IPO on volatile market conditions

Grocery delivery app Instacart is likely to postpone its plans to go public in 2022 amid market uncertainty that has left investors worried about growing volatility in capital markets, two sources familiar with the plan told Reuters.

The tech IPO market globally is in the middle of its worst drought in nearly two decades. U.S. listings have raised a little over $7 billion so far this year, according to data from Dealogic. Traditional IPOs, excluding special purpose acquisition companies, had raised a record $154 billion last year.

Instacart has not completely ruled out the option to go public, a source said, but added that the plans to list the company in 2022 looks extremely unlikely.

Instacart declined to comment on its IPO plans when contacted by Reuters.

The pandemic darling has been letting go staff, slowing hiring, and curbing other expenses, The Information reported last month, adding that the company has fired a few workers from its more than 3,000-strong workforce.

The San Francisco-based food delivery company, who was targeting a fourth-quarter listing, had planned to reveal their IPO filing in the coming days, the source said, but the plans are now halted amid market turbulence.

This comes at a time when capital market investors are shunning initial public offerings and equity markets are bleeding in anticipation of further aggressive U.S. interest rate hikes to tame inflation.

In May, Instacart said it had confidentially filed with the U.S. securities regulator to go public.

Sources had earlier told Reuters that Instacart was considering going public through either a direct listing or a traditional IPO.

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.