👁️ More Like “Insta-CUT” amirite?

This was our biggest week of 2022 so far, fellow futurists. 

This week we launched our free 40-page crossborder guide, we put out a 300th episode of the podcast, we also cemented our plans for Shoptalk. Are you going? We’d love to see you. Email us here!

The biggest news of the week: Instacart cuts its valuation 38%, while simultaneously maintaining its commitment to an IPO.

How we think about Instacart has changed. You’d be forgiven to think of it as a just-in-time workforce last-mile delivery solution. With the growth of its ad network, it has also become a formidable marketplace — CPGs and DTCs alike use it for new customer acquisition — and that growth has also made it into a powerful data and analytics platform. Brands can now perform regional price elasticity testing with tight feedback loops. 

Let’s be real. Retail is continuing to grow, but eCom is slowing due to inflation, supply chain issues, labor shortfalls, and of course reopenings. We predicted this in October 2021 in our Nine by Nine report. Retail foot traffic seems to be picking up, and that causes a dip in the convenience of digital-first purchases.

Instacart isn’t taking the shift lying down. Like others, it looks to provide general eCommerce services now as a channel for growth. This week Bay Area delivery giant is piloting direct-to-consumer fulfillment and traditional logistics for brands looking to make the move online. I.e. they’re going full-blown eCommerce and expanding their offerings beyond same-day delivery; providing a set of offerings for brands needing a site and micro-fulfillment. 

This has been done before. Shifting customers' perception of the brand beyond “I want it now” to “traditional online shopping” will be tricky. Stitch Fix recently launched “shop anytime” flexibility (we just call this eCom) with as-of-yet-unproven results. But Instacart has a specific competitor in mind: Amazon. Their offering will target grocery; a category that Amazon has yet to establish dominance in.

Same storm, different boat. The last round of investment was a $265M round in March 2021, which included A16Z, Sequoia, Fidelity, and T. Rowe Price, among others. That round would be priced at $100M based on today’s news. As the rest of the tech industry deals with the stock market pullback, private market valuations are now following suit. Instacart is not alone in this.

If you wanna read more about Instacart, check out our friend Kiri Masters book, Instacart for CMOs, which we believe is the definitive guide. Get it here.

— Phillip