Instacart IPO is latest stop on Fidji Simo’s Silicon Valley ascent

It is not every day that the daughter of a French fishing family takes a multibillion-dollar technology company public. But that is the path pursued by Fidji Simo, who led grocery delivery app Instacart to its Nasdaq debut this week.

Simo, a former Facebook executive and protégé of the social network’s then-operating chief Sheryl Sandberg, “grew up in a place where nothing in any way suggested high tech”, said Stan Chudnovsky, a former senior colleague at what is now Meta. “It’s remarkably rare for anybody, young or old, man or woman to rise as quickly as Fidji has.”

This week’s initial public offering saw Instacart jump by 12 per cent on its first day of trading, valuing the California-based ecommerce company at more than $9bn, though the stock fell the next day.

Simo, who became Instacart’s chief executive in August 2021 just as the coronavirus pandemic-fuelled tech investment frenzy was reaching its peak, was tasked with steering one of the first big US IPOs after a prolonged drought in Silicon Valley dealmaking.

Now that Instacart is a public company, Wall Street will be scrutinising whether Simo can fend off competition from rivals such as DoorDash and Uber Eats while keeping the grocery delivery service profitable.

“There’s no doubt we are a much stronger company now than in 2021,” Simo told the Financial Times. “When I took over, our gross transaction volume was actually shrinking and people believed that Instacart might just be a pandemic fad.” 

Simo, 37, was raised in the southern French port town of Sète but got “atrociously seasick” whenever her father, a fisherman, took her out on a boat, she told Marie Claire. She became the first member of her family to graduate from high school, before going on to study at one of France’s top business schools, HEC Paris.

She broke into the tech industry when she joined ecommerce group eBay in 2007, moving to Silicon Valley soon after.

Four years later Simo joined Facebook, where she found herself among a coterie of high-flying women who looked to Sandberg for guidance and mentorship.

Through Sandberg, “there was a lot of cross pollination across the female leaders” and support “for women who might want to be a CEO one day”, said Katie Harbath, a former public policy director at the social media group. 

Simo was heavily involved in the growth of Facebook’s lucrative advertising business and instrumental in the group’s push into video. In 2019, after overseeing the video and games division for two years, she was promoted to run the main Facebook app.

The Facebook Live video service, which Simo launched, quickly became hugely popular. But it was also used to broadcast graphic and uncensored footage, including the 2019 Christchurch terror attack in New Zealand.

Facebook’s advertising business — in particular the company’s management of political ads — also came under intense scrutiny following the 2016 US election. Following the Cambridge Analytica scandal, critics branded Facebook a danger to democracy. 

Being at Facebook during such controversies was instructive for Simo about “crisis management”, said Harbath. 

Facebook also taught her the value of data.

In August 2021, Simo made what seemed to many a counterintuitive move from ads and social media to become chief executive of a grocery delivery business. As she took over from Instacart’s founder, Apoorva Mehta, Simo described advertising as a “massive hidden jewel in plain sight”.

By charging brands for promotion within its app and offering retailers insights into how ads drive sales, Instacart has added hundreds of millions of dollars to its revenue. Crucially, ads have become “a major contributor” to profitability, Simo said.

People who have worked closely with Simo say she had harboured ambitions to run a company and saw the Instacart role as an opportunistic move — but not one she had planned when she had joined its board just a few months before being appointed chief executive.

Her success in guiding Instacart’s stock market performance is tied closely to her pay.

Alongside a base salary of $500,000, Simo’s potential stock awards include 900,000 shares — worth $27mn at Instacart’s IPO price of $30 — that are tied to hitting market capitalisation milestones ranging from $15bn to $30bn over the coming years.

Nonetheless, even the top end of that target falls below the company’s peak private valuation of $39bn in 2021.

While pandemic lockdowns were a boost for delivery groups, their end — combined with a squeeze on consumer spending — ushered in a more challenging environment. One long-term question for Instacart was “how big it can get”, said analysts at Bernstein, adding that its 7.7mn monthly active customers “isn’t a lot”.

Simo said she was confident Instacart would maintain market share. “When grocers work with us they get economies of scale and better efficiencies,” she said. Shoppers using rival food delivery services tended to make smaller purchases, and competitors were “not making any dent” on Instacart’s larger — and therefore more profitable — orders, she added.

Those who have worked with Simo said she was good with people, compassionate but also exacting. “Sometimes she can push too hard . . . if you work on her teams you learn a lot but you also are constantly asked for a lot,” said Chudnovsky. At the same time, “she would do anything” for her team.

Another person who worked with her said Simo “finds it very hard to relax for two hours, she never stops”.

What downtime she does have is spent with her family — her husband, who she has been with since they were teenagers, and their young daughter — or creating artworks at her California home.

Simo also regularly sees Meta founder Mark Zuckerberg, who she counts among her most trusted advisers. Speaking on a podcast last year, she said a crucial lesson from her time working for him was the “long-term focus, where you don’t really focus on just the next quarter or the next half, but you have a 10-year vision”.