(Bloomberg) -- Food delivery giant Instacart Inc. is holding off on plans to go public until at least next year, according people familiar with the matter. Instacart had been planning to file its S-1 filing this week but reconsidered amid a turbulent market, the people said.
The company’s chief executive officer, Fidji Simo, wrote in a memo to staff on Thursday night that “extremely tumultuous” markets made it “highly unlikely” that an initial public offering would be possible for the company in 2022.
Instacart earlier slashed its valuation to about $13 billion and had decided not to go public until market conditions improved.
The San Francisco-based startup, valued by investors at $39 billion in 2021, has raised hundreds of millions of dollars in venture capital funding. Instacart filed confidentially to go public earlier this year.
The declined to comment on the timing of a public offering. “We are incredibly proud of the work our teams are doing,” the company said in a statement. It added: “Our business has never been stronger.”
Instacart, the US’s largest online grocery-delivery company, surged during the pandemic as more diners ordered food from home. Since then, the company’s valuation has tumbled and it has laid off workers. In a staff meeting earlier this month, company leaders stressed that the startup’s fundamentals were healthy and told employees that it would go public when broader economic conditions improved.
The New York Times earlier reported the news of the delay.
In Thursday’s memo, which was reviewed by Bloomberg, Simo said Instacart plans to give employees a cash bonus, since “it appears unlikely we will be able to provide equity liquidity before the end of 2022.” The bonus will be based on the person’s role, performance and tenure, she said.
Simo added that she and Chief Financial Officer Nick Giovanni had met with more than 50 potential investors who have confidence in the company, “but also believe the market will not support new tech IPOs for now.”
Simo emphasized the company’s strong financial position: Sales grew more than 40% compared with last year and gross profit increased more than 45%, she wrote. Net income and adjusted earnings before interest, taxes, depreciation and amortization more than doubled from the second quarter.