Grocery delivery app Instacart has announced a conservative target valuation for its upcoming IPO, indicating caution as companies gauge investor interest in new listings. The company plans to offer 22 million shares priced between $26 and $28 per share, potentially raising up to $616 million. Following the offering, Instacart’s total common stock outstanding will be 276 million, or 279.3 million if underwriters exercise an option to purchase additional shares. This places the company’s valuation at $7.7 billion to $7.8 billion, significantly lower than its previous valuation of $39 billion from a 2021 fundraising round.
Moving Forward Carefully
Instacart, founded in 2012, recently filed for its IPO and will list under the ticker CART. Last year, the company’s internal valuation reached $24 billion in March before being reduced to $15 billion in July due to a decline in technology stocks. The decision to go public comes alongside British chip designer Arm and automation platform Klaviyo, with investors expecting a potential wave of IPOs in the near future. Arm’s IPO, expected to generate fresh capital of up to $4.87 billion, is set to launch this week.
Challenging IPO Market
The IPO market has faced challenges recently. In the first half of this year, global IPOs decreased by 5% compared to the previous year, while the capital raised from these deals dropped by 36%, according to Ernst & Young.
Instacart’s Role During The Pandemic
Instacart gained prominence during the Covid-19 lockdowns as it allowed independent contractors to fulfill orders for customers who preferred not to visit physical stores. The company operates by enabling independent contractors to browse through orders and select which ones they would like to fulfill.
Overall, Instacart’s decision to pursue an IPO with a lower valuation reflects the current market conditions and the need for companies to be cautious as they navigate investor interest in new listings.
