Instacart, one of the largest U.S. online grocery delivery firms, has set its initial public offering (IPO) price range between $26 and $28 per share, according to a filing on Monday. The company plans to issue 22 million shares, raising between $572 million to $616 million, according to the Securities and Exchange Commission (SEC) filing.
The shares comprise 14.1 million of newly issued shares from the company and 7.9 million from selling stockholders. At the higher end of the pricing scale, Instacart aims to net approximately $616 million in proceeds. The offering also includes an option for underwriters to purchase an additional 3.3 million shares from the company.
On a fully diluted basis, the IPO would value Instacart between $8.6 billion and $9.3 billion. This is significantly lower than previous valuation estimates; a $265 million funding round in March 2021 more than doubled Instacart’s valuation to $39 billion. However, the company reduced this figure in 2022 due to slowing growth.
The grocery technology firm plans to list its stock on NASDAQ under the symbol "CART". The IPO comes as part of a wave of public offerings expected to test market conditions after a year-long freeze on stock market listings due to higher interest rates and rising inflation.
Instacart's updated IPO filing comes as British chip design firm Arm also prepares for a significant debut that could value it at as much as $52 billion. Last week, Arm said its New York IPO could fetch up to $4.87 billion in fresh capital.
Instacart's financial standing has improved over the past year, with net income of $242 million during the first half of 2023 compared with a loss of $74 million during the same period in 2022. The company also generated revenue of about $1.5 billion during the first six months of 2023, up 31% year over year.
Instacart also plans to reserve 7 million shares for its 2023 Employee Stock Purchase Plan and has reiterated its agreement with PepsiCo (NASDAQ:PEP) for the consumer goods giant to buy $175 million of Instacart’s Series A stock. Sequoia and other private backers including Norges Bank, TCV, Valiant Capital, and D1 Capital plan to buy approximately $400 million of Instacart stock as "cornerstone investors", according to the filing.
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