Instacart Co-founder Apoorva Mehta Relinquishes Executive Chairman Role as Online Delivery Giant Goes Public
- The 37-year-old Indian American who founded the company in 2012, is exiting with $1.3 billion, as shares jumped more than 40% a few hours after today’s debut on the stock market.
Instacart co-founder Apoorva Mehta has ended his 11-year tenure with the company he founded in 2012. As the the San Francisco-based online delivery giant made its stock market debut today, Mehta, 37, relinquished his board position as executive chairman to current CEO Fidji Simo, after transitioning to the role from CEO last August.
The young entrepreneur, who became a billionaire in 2020, is exiting with “a $1.3 billion fortune,” Fortune reported. His addition to the Forbes coveted list of billionaires comes after Instacart’s value rose from $7.9 billion to $13.7 billion. Forbes estimated at the time that “Mehta owns a 10 percent stake, making him the newest member of the three comma club with a net worth of $1.2 billion.”
Instacart, which is incorporated as Maplebear Inc., priced its IPO yesterday (Sept. 18) at $30 a share, “giving it a $9.9 billion valuation,” news reports said. “The following day they “jumped more than 40% “when they began trading in New York and “were at $40.02 by afternoon,” the reports added.
According to the Associated Press, the IPO is “a long-awaited step for Instacart,” after it “filed privately for an IPO in May 2022 but delayed those plans last fall when the markets were roiling due to recession fears.” The company “raised $660 million in its initial public offering, selling 22 million shares at $30 apiece,” the AP reported. That pricing gave Instacart “a market value of around $10 billion, significantly lower than the $39 billion value placed on it after a fund-raising round in 2021,” the AP report added.
Data shared on the company website reveals that it “provides delivery and pickup from 85% of U.S. grocers, or more than 80,000 stores, using a network of 600,000 freelance shoppers.” It offers “retail enablement solutions for more than 1,400 retail banners across more than 80,000 locations,” the website noted.
Instacart provides delivery and pickup from 85% of U.S. grocers, or more than 80,000 stores, using a network of 600,000 freelance shoppers.
Mehta founded Instacart in 2012. The demand for the company’s delivery model has skyrocketed due to the coronavirus pandemic. Citing estimates from Instacart, Forbes reported then that the company’s “order volume has gone up by as much as 500 percent in the past 12 months,” with the average customer spending up to 35 percent more per order.
Instacart provides delivery and pickup from 85% of U.S. grocers, or more than 80,000 stores, using a network of 600,000 freelance shoppers. It also provides in-store technology, like smart carts and electronic shelf tags, and sells online ads to food companies and retailers. It says it has 7.7 million active customers who spend about $317 per month on the platform.
Mehta was born in India and grew up in Canada and Libya. He studied engineering at the University of Waterloo and worked as a design engineer at Blackberry and Qualcomm. He moved to Seattle, Washington, to work at Amazon as a supply chain engineer where he worked on Amazon’s Fulfillment Engine “to deliver packages quickly and efficiently to customers,” his LinkedIn profile says.
In a January 2017 interview with the Los Angeles Times, he said that at Amazon, he learned that he “liked to build software, and he wanted to be challenged.” But after two years, he quit his job because he felt he was no longer being challenged. He then moved from Seattle to San Francisco and started trying his hand at entrepreneurship.
In a blog on the company’s website, Mehta wrote that an incident in a small town outside of Toronto was one of the reasons he wanted to start Instacart. “I remember waiting at a bus stop carrying bags of groceries in the freezing cold,” he wrote. “Fast forward to 2012, I realized that while a lot had changed in the world, grocery shopping was the same. I wanted to change that. I wanted to make grocery shopping effortless.”
He also wrote about trying his hand at “at least” 20 companies before starting Instacart. He told the Los Angeles Times that he tried building an ad network for social gaming companies and spent a year developing a social network specifically for lawyers. “I knew nothing about these topics, but I liked putting myself in a position where I had to learn about an industry and try to solve problems they may or may not have had,” he told the paper. “While every single one of them eventually failed, I learned a lot through this journey, including things like rapid prototyping, business strategy, and managing my own psychology through the inevitable ups and downs of building a company,” he wrote on the blog. “All of these lessons continue to help me as we navigate Instacart’s growth today.”
He had a knack for fundraising as well. Over the last decade, he has raised “more than $2.8 billion from investors including Sequoia Capital and Andreessen Horowitz,” according to PitchBook. When Amazon purchased Whole Foods in 2017, Forbes noted that Instacart “aligned with Costco Wholesale Corp. and Kroger Co. to align with Instacart in the delivery wars.” Talking to the magazine, Mehta described it as “a thermonuclear bomb against the entire grocery industry.” Looking back, he says, “That has been a turning point for Instacart.”
(Top photo, courtesy, Instacart)