My Brain Food This Week...
Growth in India through Tesla, Adani and Ambani, and Instacart's true valuation
Post of the week:
Putting the (Insta)cart before the Grocery(horse): A COVID Favorite's Reality Check
(Aswath Damodaran)
Key takeaways:
Instacart filed for an IPO to raise approximately $600 million, valuing the company at around $9-$10 billion, which is significantly lower than some earlier estimations of $50 billion or more.
Instacart's business model acts as an intermediary between customers and grocery stores, offering online shopping and delivery services. It hires store shoppers to gather items for customer orders and charges fees for its services, including delivery fees and a service charge.
The grocery business in the United States has historically seen low growth and slim profit margins. This impacts Instacart's ability to extract higher fees for its services.
Online grocery shopping, while on the rise, is expected to have a lower ceiling compared to other areas of online retail, and the competition in this space is increasing.
Instacart faces challenges in its operating economics, particularly in its treatment of workers and drivers, with potential reclassification from independent contractors to employees, leading to higher costs.
💎 Africa
Egypt’s Nexus for Water, Food and Energy programme – the blueprint to fight climate change?
Ghana’s Complete Farmer, which connects farmers to global food buyers, raises $10.4M
🌏 Global
Tesla Plans to Double Auto Part Buys From India to $1.9 Billion
Tata Group needs to find the elusive elixir of growth to ward off Ambani
SoftBank seeks OpenAI tie-up as Son plans deal spree after Arm IPO