Instacart priced its IPO at $30 a share Monday night — at the upper end of its expected range — and early indications Tuesday morning suggested the stock could open slightly higher.
Trading data from Nasdaq indicated a possible opening at $40, an upside of roughly 35%.
The San Francisco-based company said late Monday it had sold 22 million shares at $30 per share, matching the high end of the $28 to $30 price range it had previously planned. At $30 per share
The market cap is $9.9 billion, based on the company’s fully diluted share count.
The IPO raised a total of $660 million, with about $420 million going to the company. The company is scheduled to begin trading on the Nasdaq stock exchange on Tuesday under the symbol “CART.”
Instacart is one of the most-watched IPOs this year, following the listing of the chip designer
(ticker: ARM) last week. They are expected to open up the IPO market, which has been quiet for most of the year. Klaviyo, a marketing software company, is also scheduled to go public this week.
Arm saw strong demand for its shares, with the stock opening 10% above its IPO price, but enthusiasm has since waned. Shares fell 4.5% on Friday and closed by the same amount on Monday.
How Instacart trades Tuesday and beyond will depend on investors’ confidence in the future expansion and profitability of the gig economy. Maplebear, as Instacart is formally known, generated $2.55 billion in revenue last year, an increase of 39% from the previous year. Nearly three-quarters of this revenue came from the company’s core business of delivering groceries to homes with the help of contractors. The rest was generated from other services and a new offering called Instacart Ads, where retailers pay to show ads to customers.
Instacart had net losses of $70 million and $73 million in 2020 and 2021, respectively. It generated net income of $428 million in 2022, although most of that came from a $358 million tax subsidy.
At $30 per share, Instacart is worth nearly four times its annual sales.
(DASH), which was named as a competitor in Instacart’s filings, has a comparable price-to-sales ratio of 4.1 times. DoorDash has consistently increased its annual sales after going public in 2020, but the company has yet to achieve earnings per share.
Instacart also lists UberEats, which is part of
(UBER), and Shipt, owned by Target, as competitors.
Instacart, founded in 2012, The company officially filed to go public on August 25 after a long wait, and the company was first Submit a confidential registration statement for a potential IPO in May 2022. In its private fundraising round, Instacart was valued at $39 billion, miles away from its current valuation.
Write to Karishma Vanjani at [email protected]
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