By Granth Vanaik

(Reuters) - Shares of Instacart rose more than 10% in premarket trading on Wednesday as strong demand for grocery delivery and promising signs of growth in its advertising business helped the company forecast an upbeat current quarter.

The San Francisco-based company has seen its stock claw back its value, after falling over 30% since its IPO in September, when investors raised several concerns around near-term growth of the company.

Instacart, which sells ads spaces on its platform, had projected third-quarter core profit and gross transaction value - a key metric that shows value of products sold based on prices shown on its platform - above analyst expectations on Tuesday.

The company has been focusing on expanding its advertising business, betting on rising demand from consumer packaged goods (CPG) companies.

At the same time, it has been broadening its same-day delivery partnerships with retailers to offer more choices to consumers amid increasing competition.

"Advertising remains a bright spot (for Instacart) ... given new and existing formats resonating well with CPG vertical," BMO Capital Markets analyst Brian Pitz said.

Instacart, which posted an 11% growth in advertising and other revenues in the second-quarter, said on Tuesday the number of active brands being advertised on the platform rose to 6,000, from 5,500 brands a year ago, with space to grow.

The delivery firm's access to first-hand data on customer shopping patterns, has made it an increasingly attractive platform for consumer-facing companies seeking to boost sales in an uncertain macroeconomic environment.

As of fiscal 2023, advertising and other revenues account for about 28.6% of Instacart's total revenue. Several analysts interviewed by Reuters expect this to increase to roughly 30% to 40% of total revenue in the coming years.

Instacart's forward price-to-earnings ratio for the next 12 months, a common benchmark for valuing stocks, is 26.47, compared to Uber's 37.75 and DoorDash's ( DASH ) 131.70, according to LSEG data.

Shares were trading at $34.50 before the bell.