Instacart raises IPO price range after robust Arm debut

Instacart Raises IPO Price Range to $10 Billion

San Francisco-based grocery delivery app Instacart has raised the price range for its initial public offering (IPO) to target a fully-diluted valuation of up to $10 billion. This move comes on the heels of a successful debut for Arm Holdings, another company that recently went public. The revised terms reflect strong investor demand for Instacart and signal a lucrative market for the company.

September is shaping up to be a busy month for new listings, with several companies preparing to go public. SoftBank’s chip designer Arm saw its shares rise nearly 3% in early trade on Friday, building on the momentum from its first day of trading. Another portfolio company of SoftBank, Neumora Therapeutics, is also set to begin trading, and marketing firm Klaviyo plans to list in the coming weeks. Overall, traditional U.S. IPOs have generated over $5 billion in September, making it the second-largest month for such offerings this year.

In its updated IPO plans, Instacart intends to sell 22 million shares at a price range of $28 to $30 each, compared to the previous range of $26 to $28. At the top end, the offering would generate $660 million, up from the earlier target of $616 million. Existing Instacart investors looking to sell their shares could potentially receive up to $237 million from the proceeds.

Despite the increased valuation target, the new range would still only be a fraction of the $39 billion valuation the company held after its last funding round more than two years ago. Nevertheless, the fact that cornerstone investors have expressed interest in buying up to $400 million worth of shares indicates strong support for Instacart.

In recent years, Instacart has experienced significant growth as the demand for online grocery delivery surged during the COVID-19 pandemic. The company’s platform connects customers with personal shoppers who fulfill and deliver their orders. By raising its valuation ahead of its IPO, Instacart aims to capitalize on its current momentum and secure a successful public debut.

The IPO proceeds will provide Instacart with additional capital to invest in its operations, expand its market share, and fund future growth initiatives. The company’s decision to go public comes as the grocery delivery market continues to evolve and faces increased competition from established players and emerging startups.

As Instacart prepares to list its shares, investors will closely watch its performance and growth strategies. The company has already made an impact in the grocery industry and is poised to capitalize on the ongoing shift towards online shopping. With a higher valuation target and strong investor demand, Instacart’s IPO is expected to be a significant event in the coming weeks.