Investments

How To Invest In Instacart

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 6 minute read

While the stock of Instacart has not yet been made accessible to the general public, the following information will help you acquire Instacart shares once they are. How to invest in instacart? Because of the coronavirus outbreak, Instacart has seen rapid expansion. As a result of people’s desire to shop from the comfort of their own homes, Instacart reports that millions of people signed up for grocery delivery as a result. According to a Harris study done for Instacart, 48% of Americans purchased groceries online during the epidemic.

A lot of people want to learn how to buy Instacart stock as a result of this surge in popularity. Instacart’s initial public offering (IPO) is planned to take place sometime in 2022, however it is currently not available to purchase stock in the firm. There are a few things you should be aware of in advance of an Instacart initial public offering (IPO).

Why do people want to invest in Instacart?

Instacart has a leg up on the competition because of its early entry into the grocery delivery app business. However, if you’re interested in investing in Instacart, there are additional reasons to do so. According to many, Instacart adds value to the economy. According to a recent report by NERA Economic Consulting, which was commissioned by Instacart, 70 percent of net grocery jobs were created between 2013 and 2019, while grocers’ earnings increased by billions of dollars.

How to acquire Instacart stock may also pique the curiosity of certain individuals owing to exciting collaborations that are involved. More than 500 stores throughout the country use Instacart, and the business just struck a deal with Kroger.

Customers may expect to get their orders within 30 minutes after placing them thanks to this cooperation. Because consumers are already used to receiving their goods within an hour or two, it’s possible that this new relationship may generate even more interest in the future.

The Instacart app’s affordability features, such as a discounts tab and access to free and reduced-cost delivery, as well as a center for dollar retailers, are all part of the company’s ongoing development efforts. Customers who don’t want to pay delivery costs may now pick up their groceries at a local grocery shop. Instacart may be able to sustain itself with the help of these new improvements.

Additionally, there is a lot of interest in an Instacart stock IPO because of the company’s potential worth, or valuation. That figure was $17.7 billion when Instacart just received $200 million. But there is conjecture that an IPO might lift that worth to $30 billion. A total of 36 investors have contributed to Instacart’s total funding of $2.9 billion over the course of 18 rounds of financing.

Fidelity Management and Research Company and Andreessen Horowitz are among the noteworthy investors. Instacart has also acquired Caper, a firm that specializes in artificial intelligence for smart carts. An established financial heavyweight, Goldman Sachs, is handling Instacart’s first public offering.

Reasons to invest in Instacart

Grocery delivery service Instacart is well-known. That’s why many individuals just go with it when they need a service that can shop and deliver. Instacart’s recent acquisition of Caper shows that the firm is continuing to invest in new technologies that improve the shopping experience and increase consumer engagement.

The “digital convenience store” model, which enables customers to receive their purchases even faster, might also offer Instacart with an additional revenue stream if the company is successful in establishing partnerships.

Pros

Despite its rapid expansion, Instacart still has a long way to go. Many individuals began shopping from home as a result of the epidemic, and it is possible that this may become a long-term habit for many.

Customers may continue to use the app even if they no longer have worries about the epidemic. If Instacart’s use and income continue to expand, you may be able to purchase the company at a reduced share price by purchasing it as an IPO stock. Instacart stock has many advantages, including the following:

  • Potential to acquire IPO shares at a low price.
  • Take advantage of the growing trend of grocery delivery services.
  • In addition to its investment in artificial intelligence, the company has plans for new functionality.

Cons

When you invest in Instacart stock, you run the risk of losing your money. Instacart’s IPO value may fall short of expectations, even if the company is expected to go public at a high valuation.

Your stock’s value may fall if an IPO fails to meet expectations after the first day of trading. It is possible that Instacart’s promise may not be realized in the future if the market or some other upheaval occurs.

Instacart, for example, is confronted with issues relating to the classification of its customers as independent contractors. Assembly Bill 5 was approved in California, requiring the classification of many independent contractors, including Instacart customers, as employees. 

AB 5 was overridden by California Proposition 22, which included Instacart and other corporations like Uber and Lyft. Additionally, additional states are likely to approve similar legislation, which may take even more of Instacart’s income. The following are the drawbacks of purchasing Instacart stock:

  • Instacart’s long-term survival may be threatened by market disruptions.
  • After the first public offering, the stock price may fall.
  • You never know what may happen.
  • It’s possible that labor concerns and other difficulties will prevent it from becoming profitable.

When to expect an Instacart IPO

Instacart’s initial public offering (IPO) date has yet to be determined. However, there is considerable conjecture that it will occur in the early months of 2022 rather than the middle of the year. Aside from that, there’s no idea what the shares may fetch when they go public. Instacart’s IPO is expected to raise its market capitalization to $30 billion, according to current expectations. ICART or INST are rumored to be the frontrunners for a future ticker.
A majority of the time, extra details are required. Either that or Instacart files its S-1 with the US Securities and Exchange Commission.

How to buy Instacart stock

Because Instacart hasn’t gone public yet, you can’t buy shares in the company yet. You can prepare ahead of time by learning how to pick a brokerage and open an account with them.
The only way to indirectly profit from investing in Instacart is to acquire shares in a company that does so. A successful IPO could benefit companies like T. Rowe Price (TROW), which is an investor.

There are other firms you may look into instead of focusing on Instacart. DoorDash’s initial public offering (IPO) was completed in 2020. When it comes to food delivery apps, DoorDash is most commonly thought of as a restaurant delivery service, but the firm has recently expanded into grocery delivery and might be a viable option for some customers.

Target is an alternative possibility (TGT). Shipt, a delivery service similar to Instacart, is owned by the retail giant. For those who aren’t confident about a new company’s stock, a long-established merchant might be a good option instead. Walmart (WMT) is also a publicly traded company on the New York Stock Exchange that provides grocery delivery services (NYSE).

You’ll need an investment account to take advantage of these opportunities. You can get started investing even if you have a small amount of money by checking out our lists of the best investment apps and the best brokerage accounts. When it comes to pre-IPO investments, you may be able to find shares of Instacart on equity trading platforms like EquityZen or Forge.

Popular investment apps like Robinhood let you get in on the ground floor of an initial public offering before it even opens for business. SoFi Invest also provides access to IPOs prior to their public debut. Our Robinhood and SoFi Invest reviews include further information.
However, exercise caution. It’s critical to conduct thorough research before making a stock purchase. If you buy a stock before its initial public offering (IPO), there’s a possibility it may turn out to be a disaster. Investing in pre-IPO equities carries a higher degree of risk.

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