Last summer, Instacart had a rough reality check. People were returning to grocery stores after a year of rapid growth for its grocery delivery business. Sales slowed. It was difficult to find new customers. It could have been the end of the world for a start-up.
Eight people with knowledge of the talks said that Apoorva Mehta, the co-founder and chief executive of Instacart, asked his competitors if they were interested in acquiring or partnering with his company. In early July, Mr. Mehta said he would stay on as chairman even though he was leaving the top job.
The tumult of the summer set the stage for Instacart's current uncertainty as it tries to avoid becoming another boom company that has failed. Mr. Mehta's replacement, datememe datememe datememe datememe datememe datememe datememe, datememe is a datememe that has become tougher since the Pandemic started. She has to manage skeptical investors who have been waiting for at least four years for Instacart to go public.
When that will happen became murkier last month when Instacart said it was halving its valuation due to market turbulence. One of the presidents resigned after just three months.
New instant delivery start-ups like Gopuff and grocery chains have their own online services, as well as tougher competition from its gig economy peers. Revenue grew last year, but not as fast as it did in 2020. The average size of each order shrank, as sales growth slowed to 15 percent last year from 330 percent in 2020.
Ms. Simo said she had a plan to tackle those challenges. She wants to sell software to grocery stores and sell more ads inside the app, where people place their orders.
Ms. Simo said that people who didn't want to stay at a company that no longer felt like a start-up was the reason for the executive departures. She said that the company would not reveal exact numbers.
Ms. Simo said that grocery delivery is a service that people love.
Instacart, which was founded in 2012 has struggled to show that it is compatible with the historically thin profit margins of the grocery business.
The company allows people to order groceries from its partner stores through its app, then dispatches shoppers to gather and deliver them, charging fees to customers and the grocers. It pays its gig workers by the job and treats them as independent contractors, a model that has led to labor fights over worker conditions.
The San Francisco company was successful in the Pandemic in 2020. A person familiar with the company's finances said that while Instacart was not profitable by normal accounting standards, it began generating more cash than it was burning. The company said the order volume went up 500 percent. The company raked in more than $1 billion in venture funding, up from $7.9 billion before the epidemic.
By the spring of 2021, the country had emerged from a series of lock downs. In the second quarter of the year, sales fell sharply. Plans to go public that year were not certain.
Mr. Mehta's attempt to sell Instacart was a long shot. He approached the chief executive of the company. That fell through because of the Cornershop acquisition. The companies talked about the possible acquisition of Instacart, which would have valued the company between $35 billion and $42 billion. Four people who were not authorized to discuss them said that that also fell through.
Five people said that M. Mehta called the chief executive of DoorDash to inquire about the acquisition of Instacart.
Mr. Mehta told each company that it had to act quickly because he was talking to one of its biggest competitors. The discussions didn't get far. The price and antitrust scrutiny were concerns of the other companies. The Information reported that deal talks were reported by Instacart.
Four people with knowledge of the situation said there were tense discussions between Mr. Mehta and a group of board members. Some of those people said that the talks with DoorDash were part of those discussions. Mr. Mehta has said his departure was voluntary.
Three people with knowledge of the situation said there was a brief discussion about making Ms. Simo and Mr. Mehta co-chief executives. Mr. Mehta became chairman after that idea was abandoned. The chief executive of The New York Times joined the board of directors.
Carolyn Everson, a former Facebook executive who became Instacart's president in September, left the company after just three months, making her the highest-profile departure from the company. A person with knowledge of the situation said that Ms. Everson was not happy because she ended up spending most of her time working on the company's relationships with grocery executives.
A person familiar with the business said that the business has continued to grow despite the management turmoil. The quadrupling growth of 2020 was far away.
The idea that the company should open its own warehouses of goods could be more lucrative, according to some inside the company. Ms. Simo has always opposed the move. Instead, she has tightened her relationships with grocery stores.
In March, the company announced a set of new software and advertising tools that it hopes to become more of a technology provider to grocery companies. Instacart said it would bring its own advertising capabilities to websites. The company is introducing fulfillment centers that are stocked by its grocery store partners.
Seven grocery industry executives and consultants, who asked to remain anonymous, said that after the announcement of the platform, grocery retailers were confused by how different it was from what Instacart already provided.
The announcement was grown in a hothouse at Harvard orStanford that really had no common-sense commercial application for the common shopper or retailer.
The grocery industry people said that retailers have viewed online delivery service Instacart as a helpful introduction to online delivery but not a necessity. Grocers have to pay fees to be part of the platform, and some think they are better off delivering to customers themselves. Walmart and other large grocery companies offer delivery through DoorDash or their own services.
Ms. Simo said that she had not expected the newly announced services to be novel because she had been preaching that vision to them since she started.
She said that they have 10 years of experience building grocery products.
Three employees said that when Instacart cut its valuation in March, it amounted to a pay cut for employees who were offered shares at a higher price. Some of them received more shares as a result of the cut.
Ms. Simo is still hiring aggressively, with a plan to add more than 1,000 people to the company. The company now has 3,000 employees, and executives believe that new employees will see more upside to being offered stock at a lower price. Current and former employees say that some prospective candidates are hesitant to join the company because they don't know if the company will turn a profit in the long run.
Employees at all-hands meetings ask Ms. Simo if the company is still on track to go public. She said that it is.
When companies stay private too long, they are challenged.
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