Apoorva Mehta, co-founder of Instacart, has amassed a substantial fortune of $1.1 billion after the company’s successful initial public offering. Mehta, at the age of 37, stepped down from his role as CEO in August 2021 and also gave up his executive chairman position on the board as part of the IPO process, passing the reins to Fidji Simo, a former executive at Meta Platforms Inc. This change marks the conclusion of Mehta’s 11-year involvement with the company, which he co-founded in 2012.
Over the past decade, Instacart has evolved from a Webvan-like platform to become the largest grocery delivery business in the United States. The company’s revenue surged by 31% to approximately $1.5 billion in the six months ending on June 30, driven partially by a strategic shift towards a more lucrative advertising business.
At its height in March 2021, buoyed by pandemic-induced demand, venture capitalists valued the company at an impressive $39 billion. Mehta’s 10% ownership stake had already propelled him into the billionaire ranks, with a fortune reaching $3.5 billion at its peak. However, as the pandemic waned and inflationary pressures mounted, Instacart, headquartered in San Francisco, faced challenges, leading to a three-fold reduction in its internal valuation throughout the past year. By October, this valuation had settled at around $13 billion.
Instacart’s IPO and Market Performance
Instacart, known by its corporate entity Maplebear Inc., set its IPO price at $30 per share on Monday, resulting in a valuation of $9.9 billion. The share prices surged by over 40% as trading commenced in New York on Tuesday, ultimately closing at $33.70.
“What matters is how Instacart performs over the next few years, rather than what it means on day one,” Mehta remarked in a phone interview following the stock’s market debut. “We focus more on the long-term and that’s what we’re excited about.”
Mehta possesses a fortune valued at $1.1 billion, which comprises a 10% stake in Instacart and an ownership share in his recent venture, Cloud Health Systems. Cloud Health Systems aims to tackle chronic illness through health-tech solutions and has successfully raised $42 million in funding from notable investors such as Thrive Capital, Andreessen Horowitz, and General Catalyst. The company was valued at $200 million during its financing round in November 2022.
In a recent stock offering, Mehta sold shares amounting to $21 million; however, he remains the largest individual shareholder in Instacart, as indicated by the amended registration filing. Venture firms Sequoia Capital and D1 Capital Partners hold larger stakes at 14% and 13%, respectively, not accounting for any additional shares they may acquire in the upcoming IPO. Instacart’s co-founders, Brandon Leonardo and Maxwell Mullen, each own a 2% stake.
The Journey of Instacart and Apoorva Mehta: Revolutionizing Grocery Shopping
Often referred to as “Webvan 2.0,” Instacart was founded by Mehta over a decade ago. He gained entry into the prestigious startup accelerator Y Combinator by showing remarkable persistence and even delivering a partner a six-pack of beer to make up for missing the application deadline by two months. Although Mehta was born in India and raised in Libya, it was his experience in a small town near Toronto that fueled his desire to revolutionize the grocery shopping experience. His discontent with waiting in the cold at a bus stop with bags of groceries led to the inception of Instacart.
Having pursued engineering studies at the University of Waterloo, Mehta honed his expertise during a two-year stint working on supply-chain logistics at Amazon.com Inc. Eventually, he decided to venture out and build his own company. Before finalizing the concept of a personal shopper that became Instacart, Mehta explored various business ideas, ranging from enterprise software to advertising startups. The inspiration for Instacart was partly driven by the cautionary tale of Webvan, a company that attempted online grocery delivery during the dot-com era and faced bankruptcy after burning through an astounding $800 million in venture funding.
Mehta exhibited a talent for fundraising, securing more than $2.8 billion in the past decade from investors such as Sequoia Capital and Andreessen Horowitz, as per PitchBook. The acquisition of Whole Foods by Amazon in 2017 could have derailed the business, but instead, it prompted retailers like Costco Wholesale Corp. and Kroger Co. to form alliances with Instacart in the delivery competition.
“It really was like a thermonuclear bomb against the entire grocery industry,” Mehta said at the time,” Mehta remarked during that time. “When we look back, that may have been a turning point for Instacart”
Transition of Leadership and Strategic Shift: Evolution of Instacart and Mehta’s New Venture
The company experienced two significant turning points. The first was when the pandemic hit in 2020, and people, confined to their homes, sought delivery options for various essentials, resulting in a surge in volume to 262.6 million orders in 2022 from 171.5 million in 2020.
Instacart reached its peak in the spring of 2021 when it secured new funding at a $39 billion valuation, doubling its value from five months earlier. However, around the same time, confidence in Mehta’s leadership waned among board members, and Mehta himself began to question his long-term commitment to the company, as disclosed by insiders. According to those familiar with the matter, Instacart also explored acquisition opportunities with DoorDash Inc. and Uber Technologies Inc.
In July, the company announced the transition of Simo, 37, to the position of CEO the following month, with Mehta assuming the role of executive chairman. A year later, Mehta made the decision to step down after Instacart’s initial public offering.
Following a decade of focusing on grocery delivery, Mehta’s new venture is delving into a different realm: weight loss. Cloud Health Systems’ inaugural brand, Sunrise, is now venturing into online weight-loss programs, which encompass prescribing medications such as Wegovy and Ozempic.
