USA – PepsiCo has agreed to purchase US$175 million of the Series A preferred convertible stock in American grocery delivery company, Instacart.

The decision was disclosed in Instacart’s Form S-1, filed with the Securities and Exchange Commission (SEC) for a proposed initial public offering (IPO).

The San Francisco company added that it intended to list shares of stock under the trading symbol “CART.”

The number of shares and pricing were yet to be determined, according to the filing by Maplebear Inc., the company in business as Instacart.

Instacart said that Norges Bank Investment Management, a division of Norges Bank, and entities affiliated with venture capital firms TCV, Sequoia Capital, D1 Capital Partners, and Valiant Capital Management indicated an interest in purchasing shares of common stock in an aggregate amount of up to around US$400m in this offering at the IPO price per share.

“We believe the future of grocery won’t be about choosing between shopping online and in-store. Most of us are going to do both,” Instacart chief executive Fidji Simo said in a letter filed with market regulators.

“So, we want to create a truly omni-channel experience that brings the best of the online shopping experience to physical stores, and vice versa.”

Last month, the grocery technology company and grocery retailer Schnuck Markets expanded their omnichannel partnership with the introduction of smart carts into select stores in the US.

Founded in 2012, the venture capital-backed startup saw its business soar early in the coronavirus pandemic as people avoided grocery stores due to the risks of COVID-19.

For the six months ended 30 June, Instacart reported revenue of $1.48bn, up 31% from the same period last year, while its advertising and other revenue surged 24% to $406m. The company reported net income of $242m during the period, compared to a loss of US$74m.

In its filing, Instacart said: “While we do not expect our pandemic-accelerated growth rates to recur in future periods, our growth during this period helped establish a business with much greater scale and much higher gross profit.”

To sustain its growth trajectory and profit margin, artificial intelligence is among the innovations that Instacart is investing in to fulfill its goal, according to the company.

Equipped with computer vision and artificial intelligence, Caper Carts automatically identifies items, thereby enabling customers to seamlessly checkout on the Cart from anywhere in the store. Caper Carts are said to be the only smart carts on the market offering a stacked charging feature.

In addition, Schnucks will be testing a Lite version, which enables customers to manually scan items before placing them inside the cart.

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