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Instacart debuts on Nasdaq with $10 billion valuation

Instacart Caper Cart
The Caper Cart is one of the grocery technology solutions Instacart offers.

Instacart has launched its initial public offering (IPO) for 22 million shares of class A common stock on the Nasdaq Global Select Market exchange.

The grocery technology company, which initially filed to go public in August 2023, issued the 22 million shares at a price of $30 per share, higher than its previous estimate of an IPO price of $26 to $28 per share. The IPO sets the company’s valuation at roughly $10 billion, producing about $660 million in profit; more than previous estimates that topped out at about $9.3 billion and $615 million in profit.

The 22 million shares in the IPO include 14.1 million being sold by Instacart and 7.9 million being sold by certain selling stockholders. Instacart will not receive any proceeds from any sale of shares by the selling stockholders. The shares trade under the NASDAQ symbol "CART."

In addition, Instacart has granted its underwriters a 30-day option to purchase up to an additional 3.3 million shares of its common stock at the IPO price, less underwriting discounts and commissions. The offering is expected to close on Thursday, Sep. 21, 2023, subject to customary closing conditions.

Instacart goes public – a primer

In a previous SEC filing announcing its intent to go public, Maplebear Inc., which does business as Instacart, disclosed Pepsico is investing $175 million in the company in a concurrent private placement.

Instacart has also disclosed it currently has backing of over $2 billion in venture funds and says it has 7.7 million active customers who spend about $317 per month. The company’s net income improved from a loss of $73 million in 2021 to earnings of $428 million in 2022.

The company said in its previous filing it has a history of losses and has only recently began generating profit, and as of June 30, 2023, had an accumulated deficit of $735 million.

A public letter from Instacart CEO Fidji Simo included in the filing focused on Instacart’s increasing role as a provider of grocery technology.

“(A) massive digital transformation is underway in the grocery industry,” Simo said in the letter. “This shift is being driven, in large part, by consumer expectations growing more diverse and complex…We want to create a truly omni-channel experience that brings the best of the online shopping experience to physical stores, and vice versa.”

Goldman Sachs & Co. LLC and J.P. Morgan will act as lead book-running managers for the proposed offering. BofA Securities, Barclays, and Citigroup will act as additional book-running managers, Baird, JMP Securities, A Citizens Company, LionTree, Oppenheimer & Co., Piper Sandler, SoFi, Stifel, Blaylock Van, LLC, Drexel Hamilton, Loop Capital Markets, R. Seelaus & Co., LLC, Ramirez & Co., Inc., Stern, and Tigress Financial Partners are acting as co-managers for the offering.

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