Instacart prices its IPO at $30 per share, raising $660 million

Instacart priced its shares at $30 each for its IPO on Monday, at the top of its expected range, a sign of renewed demand for technology stocks.

The San Francisco-based grocery delivery company had estimated its stock would cost between $28 and $30 per share. Instacart raised $660 million in the offering and was valued at $9.9 billion, significantly below its last private fundraising in 2021, which valued the company at $39 billion .

The shares will begin trading on Tuesday on the Nasdaq stock exchange under the symbol CART.

Instacart’s offering presents one of the widest gaps between a company’s private and public stock valuations, serving as a reality check for other highly valued and closely held startups. Many companies that raised money during the boom periods of 2020 and 2021 have reduced their rising valuations over the last year.

But the fact that Instacart successfully completed an IPO could give hope to other companies looking to tap into the public markets. Before last week, it had been the worst year for IPOs since 2009, according to EquityZen, a marketplace for private stocks.

Instacart’s prices follow last week’s successful debut for chip designer Arm. Arm’s stock was priced at the top of the proposed range and rose 25 percent on its first day of trading.

After Arm’s IPO, Instacart increased its offered price range.

Instacart’s journey to the public market, as well as that of Klaviyo, a marketing technology company that will also list its shares this week, has been closely watched from Silicon Valley to Wall Street. A positive reception could persuade more companies to use public markets to raise funds.

Founded in 2012, Instacart was one of several gig economy startups that use networks of contract workers to provide on-demand services like takeout, cleaning and groceries with the press of a button. button of an application. Many of these companies went bankrupt or were sold, while the biggest players – Lyft, DoorDash and Uber – struggled to turn a profit.

Instacart managed to do this by expanding into more profitable businesses like advertising and software tools under the leadership of Fidji Simo, a former Meta executive who took over as CEO of the startup in 2021. The company generated $2.5 billion in revenue last year, up 39. percent from the previous year, with $428 million in net profit.

However, it has suffered turbulence. After a surge in orders from people stuck at home during the first year of pandemic lockdowns, Instacart’s growth has slowed significantly in 2021. Last year, its grocery orders increased 18% compared to 2021 , and orders in the first half of this year remained stable compared to 2021. a year earlier.

Instacart attempted to build confidence in its public offering by securing a $175 million investment in its IPO stock from PepsiCo ahead of its listing. Sequoia Capital, which owns a 19% stake in Instacart, and D1 Capital, which owns 14%, were also among a group of companies that expressed interest in purchasing $400 million in stock Instacart’s IPO.

That was enough to attract Wall Street investors again after several years of struggling performance from young tech companies.

Apoorva Mehta, the Instacart co-founder who stepped down as chief executive in 2021, has an 11% stake. At $30 a share, his holdings are worth $869 million.

Meredith Kopit Levien, chief executive of The New York Times, serves on the board of Instacart.