Billionaires: Instacart founder Apoorva Mehta checks out with $1.1bn fortune after IPO

In our fortnightly round-up of the world’s super wealthy, Mukesh Ambani’s broadcasting unit Viacom18 strikes a deal with Blackstone for new Mumbai headquarters

Apoorva Mehta, founder of Instacart, has relinquished his board position as executive chairman after the grocery delivery company's IPO. Bloomberg
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Apoorva Mehta

Instacart co-founder Apoorva Mehta is checking out with a $1.1 billion fortune following the grocery delivery company’s initial public offering.

Mr Mehta, 37, who stepped down as chief executive in August 2021, relinquished his board position as executive chairman to current chief executive Fidji Simo, a former Meta Platforms executive.

The transition marks the end of Mr Mehta’s 11-year tenure with the company he co-founded in 2012.

In the past decade, the start-up has transformed from a Webvan clone to the largest grocery-delivery business in the US. Revenue grew 31 per cent to about $1.5 billion in the six months to June 30.

At its peak in March 2021, following a pandemic boost, the company was valued by venture capitalists at $39 billion.

Mr Mehta’s 10 per cent stake had already made him a billionaire, with a $3.5 billion fortune at its highest point.

Instacart priced its IPO at $30 a share, giving it a $9.9 billion valuation.

“What matters is how Instacart performs over the next few years, rather than what it means on day one,” Mr Mehta said after the stock began trading.

“We focus more on the long-term and that’s what we’re excited about.”

Mr Mehta’s $1.1 billion fortune includes his 10 per cent ownership of Instacart, as well as a stake in his new company, Cloud Health Systems, which aims to address chronic illness.

The health technology start-up, which Mr Mehta leads as chief executive, has raised $42 million from investors. It was valued at $200 million in a November 2022 financing round.

Mr Mehta sold stock worth $21 million in the offering, but will remain Instacart’s largest individual shareholder, according to its amended registration filing.

Venture firms Sequoia Capital and D1 Capital Partners own larger stakes, 14 per cent and 13 per cent, respectively.

Mr Mehta started Instacart more than a decade ago, getting into start-up accelerator Y Combinator after he missed the application deadline by two months.

While he was born in India and grew up in Libya, he credits his time living in a small town outside of Toronto as one of the reasons he wanted to start Instacart. He hated waiting in the cold at a bus stop with bags of groceries and believed the shopping experience should have evolved by then.

After studying engineering at the University of Waterloo, Mr Mehta spent two years working on supply-chain logistics at Amazon before deciding to leave and build a company.

He burnt through 20 ideas from enterprise software to advertising start-ups before settling on the idea of a personal shopper.

Mr Mehta had a knack for fundraising too, raising more than $2.8 billion over the past decade from investors, including Sequoia Capital and Andreessen Horowitz, according to PitchBook.

Amazon’s 2017 purchase of Whole Foods could have derailed the business, but instead it drove retailers like Costco Wholesale and Kroger to align with Instacart in the delivery wars.

“It really was like a thermonuclear bomb against the entire grocery industry,” Mr Mehta said at the time.

“When we look back, that may have been a turning point for Instacart.”

The other came when the pandemic struck in 2020 and people stuck at home were looking for ways to get everything from groceries to medicine delivered. Its volume grew to 262.6 million orders in 2022, from 171.5 million in 2020.

Instacart reached its peak in spring of 2021 when it raised new funding at a $39 billion valuation.

But around the same time, board members started to lose confidence in Mr Mehta’s leadership, according to sources.

By July, the company announced that Mr Simo, 37, would be taking over as chief executive the next month, with Mr Mehta moving to executive chairman.

Mukesh Ambani

Indian billionaire Mukesh Ambani’s broadcasting unit Viacom18 is set to sign a lease deal with Blackstone-owned Nucleus Office Parks for its new headquarters in Mumbai, spread over 400,000 square feet, sources said.

Viacom, which runs TV channels and digital streaming platform JioCinema, competes with the likes of Walt Disney in India.

Its new headquarters will be spread across eight floors in the One International Centre complex in Mumbai’s business district of Lower Parel.

“It is a marquee deal in terms of area. In Mumbai, rents are so high and every year only three to five such deals happen. This type of relocation is rare,” according to a source, who said the monthly estimated rent paid by Viacom18 will be 60 million Indian rupees ($722,180).

Mr Ambani, Asia’s richest man, has quickly expanded his media and entertainment empire. He runs TV channels including MTV, Nickelodeon and Comedy Central in India, and his streaming platform competes with the likes of Netflix and Disney+ Hotstar.

Viacom18’s shareholders include Mr Ambani’s Reliance, as well as Paramount Global and Bodhi Tree, a joint venture between James Murdoch and former senior Disney executive Uday Shankar.

Sources said Viacom18 was moving to a new headquarters as it wanted to consolidate all its business units – be it tax, finance, sports or digital – in one office.

Andrew Bialecki

The seemingly low-stakes world of text and email customer messaging revealed some big fortunes, as marketing technology company Klaviyo began trading in New York.

Andrew Bialecki founded the Boston-based company in 2012 and it grew rapidly, attracting investors including Summit Partners, Lone Pine Capital and Shopify.

Klaviyo’s $30-a-share offering price valued it at more than $9 billion based on its fully diluted share count.

That is set to make Mr Bialecki, 37, very rich. He still owns about one third of Klaviyo, making him the company’s largest shareholder, a stake worth $3.2 billion, according to the Bloomberg Billionaires Index.

Born into a family of small business owners, Mr Bialecki calls himself a proponent of ownership and independence.

“My advice to founders: raise as little as you need and prove some traction with customers,” Mr Bialecki told Inspired Capital’s Alexa von Tobel in a 2022 podcast.

“Once you do that, fundraising for the rest of your life gets a lot easier.”

After studying physics, astronomy and astrophysics at Harvard University, Mr Bialecki joined retail analytics company Applied Predictive Technologies as an engineer.

My advice to founders: raise as little as you need and prove some traction with customers. Once you do that, fundraising for the rest of your life gets a lot easier
Andrew Bialecki, Klaviyo founder

He later worked at marketing software companies Performable and Rocktech Digital before starting Klaviyo, which enables businesses to create targeted marketing campaigns, track customer behaviour, and analyse their performance.

He was joined by Ed Hallen, a Massachusetts Institute of Technology graduate who also worked at Applied Predictive Technologies and is now the company’s chief product officer.

Mr Hallen, 41, owns a stake in Klaviyo worth $1.1 billion, according to the Bloomberg Billionaires Index.

Mr Bialecki and Mr Hallen have already begun cashing in on their company’s success.

Mr Bialecki sold almost $30 million of stock in a repurchase programme in 2020, while Mr Hallen sold shares worth $90 million between 2020 and 2021.

Klaviyo had net income of about $15 million on revenue of $321 million for the first six months of 2023, compared with a loss of $25 million on revenue of $208 million for the same period last year. Its IPO raised $576 million.

“We believe in aiming long-term, getting close to the customers and being a disciplined company,” Mr Bialecki told Bloomberg Television. “I am excited for public shareholders, and to have them.”

Andrew Forrest

Fortescue Metals Group, the world’s No 4 iron ore producer and a major greenhouse gas emitter, is to end its use of voluntary carbon offsets.

Billionaire Andrew Forrest’s company, which generated 2.55 million tonnes of scope 1 and 2 carbon dioxide pollution in the 12 months to June 30, announced it had begun implementing a policy to end the purchase of credits from the current financial year.

Offsets have been beset by questions over their quality and ability to deliver genuine reductions in emissions, the miner said in an annual report last month.

Even so, the voluntary carbon market is forecast to grow to as high as $953 billion by 2037 from $2 billion now, according to BloombergNEF.

Fortescue spent $6.2 million in fiscal 2023 on voluntary offsets and surrendered a total of 336,833 tonnes of credits, according to the report.

Fortescue is aiming to eliminate scope 1 and 2 emissions by 2030, and to end the use of fossil fuels at its Australian iron ore sites.

Updated: September 25, 2023, 9:15 AM