In a highly anticipated market debut on Tuesday, Instacart, the popular grocery delivery app, appeared poised to attain a valuation of approximately $13 billion. Early indicators suggested that the stock would open 30% higher than its initial public offering (IPO) price.
The IPO for the San Francisco-based company was priced at the upper end of its projected range, at $28 to $30 per share, generating a total of $660 million in proceeds. Out of this sum, $237 million will be allocated to investors who participated in the offering.
Instacart’s IPO placed a valuation of nearly $9.9 billion on the company, which is a significant increase from its last funding round in 2021 when it was valued at $39 billion.
This strong debut by Instacart, along with successful IPOs from chip designer Arm and RayzeBio in the preceding week, may serve as an encouraging sign for other startups considering a public listing. It could potentially reinvigorate the IPO market, which had experienced an almost 18-month lull.
Instacart’s journey to Nasdaq spanned nearly three years since it initiated preparations for going public. Many startups had to adjust their valuations downward since 2022 due to factors such as inflation, geopolitical tensions, and the Federal Reserve’s swift interest rate hikes, which had cast a shadow on the economic climate.
The company’s path to Nasdaq was marked by several significant milestones. In 2021, co-founder Apoorva Mehta stepped down from his position after seven years, appointing Fidji Simo, the former head of Meta’s Facebook app, as the new CEO. Instacart’s core business also achieved profitability in 2022, a trend that has persisted in the first half of 2023, as disclosed in the company’s regulatory filing last month.
Leading the underwriting efforts for Instacart’s IPO are Goldman Sachs and J.P. Morgan.
