Instacart, a highly valued startup based in San Francisco, successfully went public on Tuesday, converting its previously theoretical price assessments into tangible wealth for many of its employees. Apoorva Mehta, one of the co-founders of the grocery delivery app, is experiencing significant financial gains. Despite cashing out nearly $20 million worth of shares during the initial public offering, Mehta, aged 37, still retains a 10% ownership stake in Instacart, as indicated in a prospectus document filed with the Securities and Exchange Commission dated September 18.
Confirmed both Mehta’s resignation and his stock holdings
This marks the culmination of a lengthy journey for Mehta, who co-established the company back in 2012. Although he stepped down from his role as Instacart’s CEO in 2021, he continued to serve as the chair of the company’s board of directors. Now, he is resigning from that position and is set to depart with approximately $850 million in Instacart stock. Instacart has confirmed both Mehta’s resignation and his stock holdings in the SEC filing.
Around 1,000 Instacart employees celebrated this milestone at the company’s San Francisco headquarters on Tuesday, as reported by Quartz. This IPO celebration has also had a ripple effect throughout the broader tech industry. It reopens the possibility of one of the classic startup exit strategies: allowing founders and employees to become multimillionaires by taking their company public and subsequently selling their accumulated shares once the company’s value has been established. This avenue had been largely blocked off since December 2021 due to declining tech stocks and a greater emphasis on profitability among investors.
A grocery delivery platform that achieved profitability
Although the IPO was deemed a success, it did result in Instacart’s on-paper valuation decreasing by approximately three-fourths since 2021. The initial surge in stock price was short-lived as well: Instacart’s first day of trading saw its stock rise from $30 to $42 per share, but by midday Wednesday, most of those gains had dissipated, with the stock trading at around $30.
Mehta shared on X (formerly known as Twitter) on Tuesday that the concept for Instacart came to him in 2012 when he discovered his refrigerator was nearly empty in his San Francisco apartment. He had experimented with 20 other startup ideas in the two years leading up to that moment, as he disclosed to the Los Angeles Times in 2017.
Instacart ultimately emerged as his standout success—a grocery delivery platform that achieved profitability through a thriving advertising business and the utilization of low-wage gig workers. When demand for delivery surged during the pandemic, it marked a turning point for Mehta’s company, leading to a substantial increase in its valuation. He subsequently passed the reins to Fidji Simo, a former Facebook executive.
