Grocery delivery app Instacart goes public

MARY LOUISE KELLY, HOST:

The grocery delivery app Instacart is now a public company. This morning, the company's CEO pressed a button in the shape of a giant carrot top - that would be Instacart's logo - to ring the opening bell of the Nasdaq stock exchange.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED PEOPLE: Three, two, one.

(CHEERING)

KELLY: NPR's Alina Selyukh is here to tell us more. Hey, Alina.

ALINA SELYUKH, BYLINE: Hello, hello.

KELLY: So I know I was not alone in keeping Instacart busy during the pandemic.

SELYUKH: Indeed.

KELLY: A lot of us - yeah - we were all ordering groceries from home. Why sell shares to the public now?

SELYUKH: Well, lately, Wall Street has been more confident, more willing to take risks. And that's kind of how you get Instacart being one of the more prominent household names testing out their hunger - pun intended.

KELLY: (Laughter) OK. So what's the pitch?

SELYUKH: Well, so Instacart's pitch is pretty obvious. It's, you know, claiming to be a Silicon Valley success story. Here comes the startup that came to dominate online grocery sales. It has a massive gig workforce. The company is actually 11 years old, but, to your point, really ballooned during the pandemic. You might remember, people were waiting for days just to sign up for a delivery. At one point, sales jumped six times - 600%. And then stores got eager to join. Now Instacart has about 1,400 retailers on board. That includes big names like Walmart and Costco and even beyond food - Petco and Sephora. And then, two years ago - new CEO arrived. Her name is Fidji Simo. She was the woman ringing the Nasdaq bell today.

(SOUNDBITE OF ARCHIVED RECORDING)

FIDJI SIMO: We wouldn't be here without the millions of customers who depend on us for one of the most noble tasks - putting food on the table for their families.

SELYUKH: And Simo comes with a pretty remarkable career path. She's just in her late 30s. She spent a decade at Facebook and really rose through the ranks there to run the big Facebook app. And so she comes to Instacart with a whole new vision.

KELLY: A whole new - OK, tell me more about her vision.

SELYUKH: Her vision is - if summarized in one word, it would be advertising. She brought that expertise from Facebook. Now Instacart is making about a third of its money selling software to retailers and promoting brands on the app. All of this is kind of a reflection of the fact that the online grocery market has really slowed down since the pandemic. During the peak of the pandemic, Instacart was worth almost $40 billion. Now it's about a quarter of that. But, partially thanks to the advertising push, it's actually profitable now.

KELLY: It is also staffed by a lot of gig workers, right, Alina? How are they responding to this news?

SELYUKH: Yeah. I've been watching for their comments, and I've seen a mix from happy to bitter. I mean, we are talking about hundreds of thousands of people here. They shop and deliver groceries to strangers. They are independent contractors. I talked to dozens of them over the years, and many have a love-hate relationship with Instacart. They love the flexible hours and hate the constant changes to pay. But last night, I actually messaged with a couple of workers who bought into the IPO. They are buying Instacart shares, buying into the company.

KELLY: That's so interesting. I guess if you are used to constant changes to your pay, you might be able to ride out the ups and downs of the stock market...

SELYUKH: Perhaps.

KELLY: ...Better than some of the rest of us. How did the IPO go?

SELYUKH: Well, maybe some people did make some money. The stock went public at $30 a share. The price instantly jumped to $42. It ended the day at almost $34. So a bit of a roller coaster ride, but still 12% higher than the day began.

KELLY: All right. NPR's Alina Selyukh, thank you.

SELYUKH: Thank you.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.