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Instacart IPO valuation could reach $9.3 billion

Instacart is preparing to list its common stock on Nasdaq.

Instacart plans to issue a total of 22 million shares of class A common stock on the Nasdaq Global Select Market exchange.

In an SEC filing, the grocery technology company said that along with certain selling shareholders, it will issue 22 million shares, including 14.1 million shares from the company and 7.9 million existing shares from stockholders, plus up to an additional 3.3 million shares, in aggregate as part of the listing.

Maplebear Inc., which does business as Instacart, currently estimates that the initial public offering (IPO) price for its common stock will be between $26 and $28 per share. That would value the company between $8.6 billion and $9.3 billion, and produce up to more than $615 million in profit for Instacart at the high end of the valuation.

In a previous SEC filing announcing its intent to go public, Instacart disclosed Pepsico is investing $175 million in the company in a concurrent private placement. Instacart intends to list its common stock on Nasdaq under the symbol "CART."

Instacart 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. Instacart 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.” Grocery is the largest retail category and represents a $1.1 trillion industry in the United States alone. But only 12% of grocery sales are made online today. As even more people shop online, online penetration could double or more over time.

“This shift is being driven, in large part, by consumer expectations growing more diverse and complex,” Simo said. “We believe the future of grocery won’t be about choosing between shopping online and in-store. Most of us are going to do both. So 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 will act as co-managers for the proposed offering.

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