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Instacart IPOs, Teases $42/Share
Kitchen United names new CEO, Oracle + Uber launch Collect and Receive, DASH stock
If you work in, or care about, the modern delivery industry, today’s a big day! With Instacart off to the public markets (and performing strongly,) it’s a huge validator for the way the world has been reshaped by the ability to click a button on your phone and have goods, foods or services dropped off to you in just a few minutes. We’ve got analysis on that, and more, below.
Instacart Pops on IPO, But What’s Next?
Kitchen United Names New CEO, Plans Expansion
Chart Time | DoorDash Stock Wobbles
Oracle & Uber Launch Collect and Receive
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FINANCE | Instacart Stock Teases $42 Open
It’s a big day for the delivery technology community, as industry stalwart Instacart ($CART) finally heads to the pubic markets. After seeing other tech stocks open well in the past few weeks, company execs bumped Instacart’s listing price up to $30 per share, valuing the company around a cool $10 billion and raising $660M in fresh cash for the SF-based company. Investors found that to be conservative, as the Nasdaq-listed company’s shares were quickly bid up to nearly $42; as of send-time they’ve settled around $39-40 per share. (Note: this newsletter is not financial advice.)
The Big Picture: While that stock price represents a nice improvement over the past few months, it’s still down a good ways from the company’s highest highs in the depth of the pandemic, when VCs thought the company was worth a whopping $39 billion. And while the company has recently shown it can earn a profit, that may prove elusive given the continued competitive innovation from the likes of Uber Eats, DoorDash and even grocers like Walmart and Albertsons; Instacart will have to keep pushing its higher margin ad business if it wants to stay in the black. Despite the opening day festivities, it’s also not all fun and games for company founder Apoorva Mehta; he will be stepping down as the company’s chairman as part of the public listing, more than two years after he was pushed out as CEO due to chaotic management issues, replaced by former Facebook exec Fidji Simo.
GHOST KITCHENS | Kitchen United Picks New CEO, Targets Int'l Growth
Ghost kitchen and dining hall operator Kitchen United named Atul Sood its new CEO, a few weeks after Michael Montagano exited the position to join Dog Haus. Sood had been serving the Pasadena, CA-based company as Chief Business Officer and has been with KU from the beginning, brought on for his industry knowledge thanks to a previous stint at McDonald’s. As CBO, Sood was responsible for Kitchen United’s partnership with grocery giant Kroger, which has come to be his company’s largest differentiator from industry peers.
The Big Picture: After raising $100M from strategically aligned investors (Restaurant Brands International, Kroger, Simon, Couche-Tard / Circle K) last summer, Kitchen United should have the war chest to navigate the choppy waters that have affected competitors like CloudKitchens, VDC and Nextbite. By using existing spaces like supermarkets, KU not only can control build out costs, it can tap into existing foot traffic while also keeping a better eye on food quality.
CHART TIME | DoorDash’s Bumpy Stock Market Ride
It’s been a wild few days for DoorDash’s stock price, after spending a long period quietly hovering around the $80-82 mark. Yesterday shares jumped a few dollars as investors processed the company’s new grocery and alcohol partners; analyst Mizuho upgraded the stock to buy with a whopping $105 target, while D.A. Davidson lifted its outlook to a more modest $85. So far today the stock has undone yesterday’s gains and then some, as investors seemingly wait to see how Instacart’s IPO moves. Live data puts the stock at DASH 0.00%↑ for the day so far.
3PD | Uber & Oracle Launch Collect and Receive
Uber and Oracle are launch a new product called Collect and Receive, announced today at the enterprise giant’s CloudWorld conference. The new tool plugs in to Oracle’s Retail Data Store cloud service, used by large brands like Versace, Abercrombie & Fitch, Best Buy, Giant Eagle and more. The heart of the new offering is pre-integrated API access to Uber Direct, meaning retailers can now instantly offer white label express delivery services.
The Big Picture: Uber Direct currently has ~3,500 brand users, and this partnership is sure to push that number higher, with large retailers enticed by polling that shows 75% of consumers expect express delivery as an option, and 72% are more likely to continue ordering from companies that offer that service. Both companies have been on expansion spates as of late: Uber just scored another partnership for Direct with POS / online ordering suite Deliverect, while Oracle rolled out a lower-cost restaurant management platform and POS.
A Few Good Links
Cartken and Grubhub launch delivery bots at Cal State University Bakersfield. Why Donato’s Pizza (200 locations) sees growth in “robo-pizzeria” vending machines. Jack in the Box opens first drive-thru and walk-up only restaurant featuring refreshed branding. USPS readies for holiday surge, plans zero pricing surcharges. Shipt and Visa team up for college football tailgate campaign. National Cheeseburger Day crashes McDonald’s and Wendy’s apps.
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