Dj Maplebear Inc Com, Inst Holders, 3Q 2024 (Cart)

(Bloomberg) -- After joining Instacart more than three years ago, Chief Executive Officer Fidji Simo had to earn buy-in from staff about her vision to reimagine the grocery-delivery company as a provider of e-commerce technology for supermarkets. Now, she also needs to convince Wall Street skeptics.

The pandemic-fueled valuation boom that Instacart benefited from has since dwindled as Americans emerged from lockdowns and returned to in-store shopping. The company’s market value has plummeted to just over $10 billion from its pre-IPO peak of $39 billion.

“We were kind of the poster child for an unprofitable company,” Simo, a Facebook executive prior to joining Instacart, said in an interview with The Circuit with Emily Chang at the firm’s San Francisco office. “The way I reset with the company is to say, ‘let’s kind of forget about what the external world is valuing us at, and let’s talk about building a generational company and that means a company that can grow sustainably and that is profitable.’”

Convincing investors of the company’s long-term potential in grocery technology remains an ongoing challenge. More than a year after the firm went public, trading under the name Maplebear Inc., analysts disagree on their recommendation for the stock. Data compiled by Bloomberg shows it has 16 hold ratings and 14 buys.

Last week, Instacart gave a mixed outlook in its latest earnings report, providing weaker-than-expected guidance for fourth-quarter adjusted earnings even though grocery delivery sales remained resilient in the third quarter. The company’s stock dropped by a record 11% the day after the results were announced.

Simo has made Instacart’s higher-margin enterprise business a bigger priority since taking the top job. Those products include handling last-mile delivery, building white-label websites and selling advertising slots on the Instacart app. It’s also pushed into brick-and-mortar offerings like electronic shelf tags and smart shopping carts for domestic and international supermarket chains.

Part of her faith in equipping a traditionally offline industry with digital tools is rooted in her upbringing in the idyllic port city of Sète in the south of France, where her family, including her father, uncle and grandfather, has participated in the fishing industry for multiple generations.