Instacart gets PepsiCo investment pledge for planned public share offer

PepsiCo has agreed to purchase $175m of the Series A convertible shares via a private placement.

Simon Harvey August 29 2023

Grocery delivery service Instacart has revealed plans for a public share offering, with PepsiCo making an upfront commitment of $175m.

A final offer size and individual share price have not yet been determined as San Francisco-based Instacart, registered as Maplebear Inc., seeks a listing on the Nasdaq exchange.

Founded in 2012, Instacart claims to partner with 1,400 retail “banners” covering 85% of the US grocery market. It had a so-called gross transaction value of $14.9bn in the first six months of its current financial year to 30 June, up from $14.4bn in the corresponding period.

Revenue for the period climbed 13% to $1.5bn, while adjusted EBITDA turned from a $20m loss to a $279m profit. Net income was a positive $242m, compared to a $74m loss a year earlier.

In the IPO filing with the US Securities and Exchange Commission, Instacart said food and beverage giant PepsiCo had agreed to purchase $175m of the Series A convertible shares via a private placement. Goldman Sachs is acting as the agent for that offering.

Meanwhile, other investors have made commitments to $400m in IPO shares - Norges Bank Investment Management, a division of Norges Bank, affiliates of TCV, Sequoia Capital, D1 Capital Partners and Valiant Capital Management,

“The cornerstone investors have indicated an interest, severally and not jointly, in purchasing shares of common stock in an aggregate amount of up to approximately $400 million in this offering at the initial public offering price per share and on the same terms as the other purchasers in this offering,” Instacart said in the filing.

It added: “Sequoia Capital and D1 Capital Partners are significant stockholders and affiliates of members of our board of directors. Because indications of interest are not binding agreements or commitments to purchase, the underwriters could determine to sell more, fewer, or no shares to any of the cornerstone investors, and any of the cornerstone investors could determine to purchase more, fewer, or no shares in this offering.”

Goldman Sachs and JPMorgan Chase & Co are the lead managers for the IPO.

Instacart said the funds raised from the share offer will “increase our capitalisation and financial flexibility”.

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