Instacart’s IPO values the company at $9.9 billion

The San Francisco-based company sold 22 million shares for $30 each on Monday, according to a statement. Instacart and current shareholders had offered the shares for $28 to $30, a range that was elevated after chip designer Arm Holdings Plc rose 25% in its trading debut Thursday after the year’s biggest IPO.

At the IPO price, Instacart has a fully diluted valuation of $9.9 billion. That’s a steep plunge from its $39 billion valuation in a 2021 funding round when its business boomed amid pandemic lockdowns, but still ranks it as one of the biggest companies to go public this year.

Instacart’s listing combined with Arm’s is also giving equity capital markets much-needed relief after the longest drought since 2009 in the depths of the financial crisis. As a venture-backed consumer startup, success in its trading debut could pry open the IPO market for other companies looking to go public.

Klaviyo, Birkenstock

Marketing and data automation provider Klaviyo Inc. is planning to sell its shares Tuesday, with German footwear maker Birkenstock Holding Ltd. also preparing to list.

Even with Instacart’s IPO and Arm’s $5.23 billion listing, which now includes so-called greenshoe shares, only about $21 billion has been raised this year on US exchanges, according to data compiled by Bloomberg. That’s finally catching up with the $22 billion at this point last year but still less than a 10th of the $250 billion total for the period in a record-setting 2021, the data show.

Pricing Decision

Instacart decided earlier Monday to price its shares at $30 or more, Bloomberg News reported. Like Arm, which also considered pricing its shares above the marketed range, Instacart chose in the end not to exceed the offered terms.

Taking another cue from Arm, Instacart had also lined up big investors to support its listing. PepsiCo Inc. is buying $175 million of Instacart’s preferred convertible stock. It has 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.

Instacart’s largest investors include Sequoia Capital and D1 Capital Partners, according to the filing. Other investors have included Tiger Global Management and Coatue…