• The Wall Street Journal reports that Instacart "generated sharply higher sales and profit in the fourth quarter, according to people familiar with the matter and an internal memo, as the company prepares for its highly anticipated initial public offering of stock.
"The grocery-delivery company told employees on Tuesday that its revenue increased more than 50% in the fourth quarter, compared with the same period a year earlier, while gross profit rose more than 80% … Instacart’s full-year revenue increased 39% to about $2.5 billion for 2022, people familiar with the matter said, as the company reaped the benefits of a push into advertising while it has struggled to increase order volume at the same pace it did during the height of the Covid-19 pandemic."
According to the Journal, "Instacart in 2022 processed $29 billion in overall sales across the platform, a measure known as gross transaction volume, up about 16% from the previous year, the people said. The company in the fourth quarter reported positive net income and generated more than $100 million in adjusted earnings before interest, taxes, depreciation and amortization, the people said … Instacart added more stores to its platform and introduced food-stamp payments last year and its Instacart+ membership grew, according to the memo. The company’s advertising products generate a more than 15% increase in sales for brands and are resonating with companies, according to the memo."
The Journal notes that "by showing it is profitable, Instacart could appeal to more potential public investors," which will be important as it considers timing for an IPO at a time when "the U.S. IPO market ground to a near halt."
• From the Wall Street Journal:
"Amazon employees will soon be able to use their company shares as collateral when buying homes, under an arrangement with online mortgage lender Better.com.
A new Better.com product, Equity Unlocker, will allow employees to pledge stock for loans for down payments, the companies said, rather than having to sell the stock to raise cash.
"To protect itself from a continued slide in Amazon’s stock price, Better.com will charge a higher rate on the mortgages of employees pledging stock—between 0.25 and 2.5 percentage points above the market rate, depending on how the down payment is structured, the company said.
"However, unlike in stock-based loans that carry the risk of margin calls, requiring borrowers put up more collateral or sell assets to reduce debts, Amazon employees’ loan arrangements would be protected if the stock price slides … An Amazon spokesman said the new service aligns with Amazon’s benefits program that seeks to care for the financial wellness, mental wellness and physical wellness of its employees."