Instacart Inc., the San Francisco-based grocery-delivery company, is gearing up for its much-anticipated initial public offering (IPO), potentially set to take place as early as September, according to individuals familiar with the matter. The move has the potential to inject fresh energy into the landscape of US listings, which faced a slowdown in 2020 due to the pandemic.
Sources reveal that Instacart is diligently preparing to publicly file its IPO plans with the US Securities and Exchange Commission (SEC) in September, with intentions to secure a spot on the Nasdaq through a traditional offering. These details were disclosed by anonymous insiders who are not authorized to discuss the matter publicly. A spokesperson from Instacart declined to provide any comments regarding the ongoing developments.
The upcoming IPO of Instacart could serve as a significant catalyst within the context of the broader market trends. In 2020, the global health crisis impeded the momentum of IPOs on US exchanges, resulting in a modest $14 billion in funds raised. This pales in comparison to the remarkable $241 billion that flooded into IPOs by the same period in the record-breaking 2021 IPO year, as documented by data collected by Bloomberg.
The resurgence of IPOs is gaining further traction, with prominent entities such as chipmaker Arm Ltd., which is predominantly owned by SoftBank Group Corp., poised to enter the public market in September. Arm Ltd.’s anticipated IPO, projected to reach a staggering $10 billion, could potentially position it as the most substantial IPO of the year.
Instacart had initially contemplated a direct listing as an alternative route to going public. However, the tumultuous market conditions experienced in 2021 prompted the company to reconsider, ultimately opting for a more traditional IPO path. This decision coincided with a period in which Instacart’s internal valuation experienced a dip, descending from $24 billion to $13 billion.
PitchBook, a prominent data provider, assessed Instacart’s valuation at $39 billion in its most recent valuation. The online grocery-delivery startup has successfully secured $2.74 billion in funding, with an impressive roster of investors that includes Tiger Global Management, Coatue Management, and D1 Capital Partners.
The imminent filing with the SEC by Instacart is poised to offer a comprehensive overview of the company’s financial performance and operational dynamics. Additionally, this preliminary filing is expected to encompass key elements of the offering, although finer details, such as the exact size and price of the share sale, will be subsequently elaborated upon in the company’s subsequent submissions.
The advent of Instacart’s IPO could potentially mark a pivotal milestone for the broader US market, infusing a much-needed sense of momentum into the investor sentiment that has undergone a transformation in the past year. As the anticipation builds, market participants are keenly observing the trajectory of Instacart’s IPO journey and its potential impact on the evolving landscape of US listings.