Instacart IPO tests anxious market for new public listings

Instacart, officially Maplebear Inc., is seeking to raise as much as $660 million Monday at a valuation of more than $9 billion and begin trading Tuesday.

The San Francisco company is striking while the iron is hot, on the heels of Arm Holdings Plc lodging the year’s biggest IPO and then rising 25% in its trading debut last week. Shares of the chip designer, still 90% owned by SoftBank Group Corp., slipped Friday but remained up almost 20% above the offer price.

If Instacart trades well, it will add momentum for other listings. Boston-based marketing and automation startup Klaviyo Inc., which is expected to price its IPO Tuesday, decided on Sunday to boost its target for the listing to $557 million, Bloomberg News reported. German footwear maker Birkenstock Holding Ltd. is also preparing to go public within weeks.

Taking its cue from Arm, Instacart is taking the safe route by lining up big investors to support its listing. It’s brought on PepsiCo Inc., one of its partners, to participate in the deal.

Cornerstone Investors

It’s also enlisted Norway’s Norges Bank, TCV, Sequoia, D1 Capital Partners LP and Valiant Capital Management as cornerstone investors that could take up to 60% of the shares, according to its prospectus. 

That’s several times more than what’s generally seen in IPOs, setting up Instacart to benefit from a scarcity of available shares when its stock begins trading.

Founded in 2012, Instacart was a pioneer in online grocery delivery and rose to high-flier status with a $39 billion valuation during the coronavirus pandemic, when it became a household name with shoppers stuck at home. But as the virus waned and investors factored in higher interest rates and a potential recession, Instacart struggled. It slashed its internal valuation three times last year, the last time to about $13 billion in October.

On Friday, Instacart elevated its target for the IPO to $28 to $30 a share. On a fully diluted basis, that would value the company at $9.9 billion at the top end of the range.

Simo’s Pivot 

Chief Executive Officer Fidji Simo, who replaced co-founder Apoorva Mehta in 2021, has tried to reshape the business by pivoting to advertising and technology over grocery delivery, taking advantage of the…