Random Walk at Night: Instacart's Delight

Insights from the Instacart S-1 and the ecosystem at large

Good evening, friends, both old and new.

This is the new Random Walk, which is like the old Random Walk, but posts are now shorter and more frequent. For tonight’s main event, we’ll nestle into our favorite armchair and take a peak into the magical world of grocery delivery. It turns out that Instacart is pretty neat.

Enjoy.

Random Walk at Night

Instacart’s Delight

The venture community is doing a good job of maintaining a positive outlook—as they should—but the slowdown in funding is real (and shows up in the data).¹

While it’s purely anecdotal, I’ve been noticing more and more “interesting” startups quietly merging with larger orgs (here and here most recently, but there are others). My assumption is that these founders failed to show enough growth to justify raising another round (and therefore had little choice but to sell), rather than received offers they couldn’t refuse, but I certainly don’t know that to be true. In all events, gloominess aside, lest it be overlooked, it’s a remarkable achievement to build a thing, even if the “exit” won’t buy a yacht, so everyone deserves to hold their heads very high.

The good news for the ecosystem at-large is that two venture-backed companies recently filed their S-1s to go public, and they’re not the loss-making dogs that investors have come to expect (recently, at least).²

Instacart and Klaviyo are both growing and profitable, just like nature intended, and people, especially venture people, are excited.

IPOs are important to the venture ecosystem—it’s the pot of gold at the end of the capital conveyor belt that justifies all the earlier rounds of investment. If the public markets get shy, then late stage investors get shy, which means slightly earlier stage investors get shy, and so on and so forth. For unprofitable companies (like most venture-backed companies), waiting for the conveyor belt to get moving again can be a death sentence.

Unclog the logjam, though, and everything gets moving again (so the thinking goes).³

Anyways, there are more informed teardowns of both S-1s elsewhere (here and here to start). RW will focus on a few interesting asides from the Instacart filing specifically (bc including Klaviyo made the post too long and people apparently don’t like too long). It also helps that both companies included lots of pretty pictures in their filings.