Grocery-delivery startup Instacart named a new chief executive from Facebook Inc. on Thursday, moving its founder to the position of executive chairman ahead of an anticipated initial public offering.
The new CEO, Fidji Simo, had worked at Facebook
for a decade, most recently as head of the core Facebook app. She became the first female board member at Instacart in January, and current CEO and founder of the company Apoorva Mehta said he has “been blown away by her capabilities as a leader.” She becomes Instacart’s CEO effective August 2.
The news comes ahead of the San Francisco-based company’s expected debut on the public stock markets this year, and on the heels of Instacart’s success during the coronavirus pandemic, which gave a boost to grocery delivery. Instacart, a gig company that relies on delivery workers summoned by app, says it now delivers from almost 55,000 stores in more than 5,500 cities in North America.
Instacart said in March that a new $265 million funding round led by Andreessen Horowitz, Sequoia Capital and others increased its valuation to $39 billion, the third most valuable VC-backed startup behind only Stripe and SpaceX, according to PitchBook. While one report last year said Instacart had picked Goldman Sachs to lead its IPO, another report in March said the company was considering a direct listing instead.
One analyst found it curious that Mehta would relinquish the CEO role ahead of the company going public.
“Interesting and très unusual,” said Sucharita Kodali, a principal analyst at Forrester who covers e-commerce and more. “I don’t know why a founder-CEO would allow that so close to an IPO.”
In an interview with CNBC, Simo would not comment on the timing of a possible Instacart IPO, saying she was more concerned with building up the company over the next decade.
“We want to continue scaling,” she said. “We have a massive opportunity ahead of us in this trillion-dollar market.”
In a letter to customers Thursday, Mehta said he “had never previously contemplated the idea of someone else running the company,” but that he changed his mind when he met Simo.
“Fidji will simply be a better CEO than me for Instacart’s coming years,” he wrote, though he added that as chairman he would continue to be “very engaged day-to-day and to partner with Fidji to shape our long-term vision.”