Instacart to Target Much-Diminished Valuation Range of Under $10 Billion in IPO
Grocery-delivery company aims for $8.6 billion to $9.3 billion, down from $39 billion in 2021; roadshow to start as early as Monday
By Corrie Driebusch and Jaewon Kang
Wall Street Journal
Updated Sept. 10, 2023 2:45 pm ET
Instacart sends couriers to grocery stores to pick out and deliver orders to customers’ homes./ PHOTO: BRITTANY GREESON FOR THE WALL STREET JOURNAL
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Instacart is targeting a valuation of roughly $8.6 billion to $9.3 billion in its imminent IPO, a fraction of what the grocery-delivery company was previously worth, in the latest sign of diminished investor enthusiasm for private growth companies.
Instacart is set to start marketing its long-anticipated initial public offering to investors as early as Monday, and plans to disclose the expected valuation range then, according to people familiar with the matter. The San Francisco company’s plans could still change and it is possible the range could move around as the company receives feedback during the roadshow.
The shares are expected to begin trading the following week on the Nasdaq exchange under the ticker CART.
The expected valuation, on a fully diluted basis, is a far cry from the roughly $39 billion Instacart garnered in a fundraising round in 2021, the year it started laying the groundwork for a public listing. Since then, valuations of high-growth startups have fallen as interest rates rose, making riskier investments less attractive.
The company’s stock-market debut is a bellwether for the IPO market, muted for much of this year and last, and it will be closely watched by investors, bankers, lawyers and traders. It will follow the highly anticipated offering by British chip designer Arm Ltd., whose shares are expected to debut this week in the biggest U.S. IPO of the year. Marketing-automation platform Klaviyo is also set to launch its roadshow this week.
Founded in 2012, Instacart sends couriers to grocery stores to pick out and deliver orders to customers’ homes. The company has raised more than $2 billion in venture-capital funding over the years and has long said it expected to go public.
CEO Fidji Simo has focused on expanding Instacart’s core delivery business. / PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS
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Instacart filed confidentially to do so last year and had planned to list its shares by the end of 2022. It pulled back on those plans last fall, pointing to tumultuous market conditions.
The company revealed its financials last month, saying it generated $242 million in profit for the first six months of the year compared with a $74 million net loss a year earlier.
Instacart’s revenue increased by about 31% to $1.5 billion, though the growth of its core delivery business is slowing, with the number of orders remaining relatively flat over the past year. Revenue from advertising and other businesses rose by about 24% in the period.
Instacart got a boost to its business in 2020 when consumers and retailers turned to the company as the pandemic spread across the country and people skipped in-person shopping. Instacart took advantage of the demand surge, raising multiple rounds of funding.
Fidji Simo, a former Meta Platforms executive, joined the company in 2021 as chief executive and has focused on expanding Instacart’s core delivery business while diversifying into other areas such as advertising and technology services like websites and smart shopping carts.
Instacart doesn’t plan to raise much money for itself in the offering, people familiar with the matter said. Instead, much of the selling will be by employees and other early stakeholders.
—Berber Jin contributed to this article.
Write to Jaewon Kang at jaewon.kang@wsj.com
Instacart to Target Much-Diminished Valuation Range of Under $10 Billion in IPO - WSJ (archive.ph) |
