Instacart Raises Its IPO Pricing After Arm’s Recent Successful IPO

Instacart has raised the target range of its IPO shares from $26 to $28 per share to $28 to $30 per share while seeking to raise about $660 million. The company’s higher pricing brings its market valuation to a high of $10 billion, which shows the optimism behind the stock market debut.

As the leading online grocery delivery firm in the  United States, Instacart is seeking a market valuation of $10 billion, pricing it at a premium to its peers. Still, the company’s current valuation pales compared to its 2021 peak valuation of $39 billion.

The current environment has been challenging for grocery retailers, which explains the company’s much lower valuation today compared to two years ago. Still, the higher valuation being sought by Instacart is an indicator that the US IPO market is improving after a significant drought. 

Cornerstone investors have committed to buying as much as $400 million of Instacart shares, with Pepsi Co. agreeing to buy $175 million of Instacart’s preferred shares during its IPO. Therefore, the cornerstone investors will take up about two-thirds of Instcart’s available IPO shares. 

Instcart plans to offer 22 million shares priced between $28 and $30 for $660 million. The grocery technology company filed its IPO documents with the United States Securities and Exchange Commission (SEC) last month, detailing its plans to become a publicly traded company through an IPO scheduled for this month. 

The company was founded over a decade ago, in 2012 and has swiftly become a consumer favorite in grocery and goods delivery. The company has partnered with 1,400 national, regional, and local retail brands across over 80,000 stores, representing nearly 85% of the U.S. grocery industry.

Instacart’s infrastructure, reach, and brand loyalty are incredible, serving millions of consumers daily. The company has used its massive reach to help improve the health outcomes of its customers by partnering with Partnership for a Healthier America (PHA), a non-profit dedicated to improving health equity. 

The goal of the above partnership is to increase the number of Americans eating fresh fruits and vegetables, which has been quite successful. Notably, 79% of families receiving produce credits reported that they planned to eat more fruits and vegetables.