Apoorva Mehta, Co-Founder of Instacart, has secured a staggering $1.1 billion in wealth in the wake of the grocery delivery company’s successful initial public offering. Mr. Mehta, aged 37, who transitioned from his role as CEO in August 2021, recently stepped down from his position on the board, making way for Fidji Simo, a former executive from Meta Platforms, who now serves as the company’s CEO.
This transition marks the conclusion of Mr. Mehta’s remarkable 11-year journey with the company he co-founded back in 2012.
Over the past decade, this startup has undergone a remarkable transformation, evolving from a Webvan-inspired concept into the largest grocery delivery enterprise in the United States. During the six months leading up to June 30, the company achieved a notable 31 percent growth in revenue, reaching approximately $1.5 billion.
At its zenith in March 2021, bolstered by the surge in demand during the pandemic, venture capitalists valued the company at an impressive $39 billion. Mr. Mehta’s ownership stake, amounting to 10 percent, had already propelled him into the billionaire ranks, with his wealth peaking at an astonishing $3.5 billion.
Instacart, in its IPO, priced shares at $30 each, thereby bestowing upon the company a notable valuation of $9.9 billion.
Mr. Mehta, when reflecting on the stock’s trading debut, emphasized the significance of Instacart’s performance in the coming years, rather than its initial market reception. He stressed, “We focus more on the long-term, and that’s what we’re excited about.”
Mr. Mehta’s impressive $1.1 billion fortune comprises a 10 percent ownership stake in Instacart and an interest in his latest venture, Cloud Health Systems. Cloud Health Systems is a health technology startup, and Mr. Mehta serves as its Chief Executive Officer. The company has successfully secured $42 million in investment from various backers, and its valuation reached $200 million during a financing round in November 2022.
While Mr. Mehta sold stocks valued at $21 million during the offering, he retains his position as Instacart’s largest individual shareholder, as indicated in the amended registration filing.
Venture firms Sequoia Capital and D1 Capital Partners possess larger ownership stakes, at 14 percent and 13 percent, respectively.
Mr. Mehta’s journey with Instacart commenced over a decade ago, sparked by a fortuitous entry into the Y Combinator start-up accelerator program after he had missed the application deadline by a mere two months.
Born in India and raised in Libya, Mr. Mehta’s inspiration for Instacart was influenced by his time residing in a small town near Toronto. There, he grew frustrated with the experience of waiting at a chilly bus stop while juggling bags of groceries, leading him to envision a more efficient and convenient shopping solution.
After pursuing engineering studies at the University of Waterloo, Mr. Mehta dedicated two years to refining his expertise in supply-chain logistics at Amazon. However, he eventually made the life-altering decision to depart from the tech giant and embark on his entrepreneurial journey.
During his entrepreneurial quest, Mr. Mehta explored a diverse array of concepts, ranging from enterprise software ventures to advertising startups. It was during this exploratory phase that he stumbled upon the concept of a personal shopper, ultimately settling on this innovative idea.
Mr. Mehta also exhibited a remarkable talent for fundraising, securing over $2.8 billion in investments over the past decade. Notable investors in his journey included venture capital powerhouses like Sequoia Capital and Andreessen Horowitz, as documented by PitchBook.
In 2017, Amazon’s acquisition of Whole Foods presented a potential threat to the business, but instead, it ignited a fierce competition among retailers such as Costco Wholesale and Kroger, all eager to partner with Instacart in the rapidly evolving delivery landscape. At the time, Mr. Mehta remarked, “It really was like a thermonuclear bomb against the entire grocery industry,” and he considered it a potential turning point for Instacart.
Another significant turning point arrived with the onset of the COVID-19 pandemic in 2020. With people confined to their homes and seeking safe and convenient ways to obtain essentials, Instacart experienced explosive growth. The volume of orders surged from 171.5 million in 2020 to an astounding 262.6 million orders in 2022.
Instacart reached its zenith in the spring of 2021 when it successfully secured new funding at a remarkable valuation of $39 billion.
However, around the same period, there were indications that board members were growing uncertain about Mr. Mehta’s leadership, as reported by sources familiar with the situation.
By July, the company made a significant announcement – Fidji Simo, aged 37, would assume the role of Chief Executive Officer the following month, with Mr. Mehta transitioning to the position of Executive Chairman, marking a pivotal moment in the company’s evolution.