September 24, 2023

Instacart Prices IPO At $30 Per Share, Valuing The Online Grocery Platform At Nearly $10B


Instacart is set to make its public debut on Tuesday. The grocery delivery platform company priced its initial public offering at $30 per share on Monday, which is at the top end of the expected $28-$30 range. 

What Happened: The company said in a statement that the IPO comprises 22 million shares of common stock, out of which 14.1 million are being sold by Instacart and 7.9 million by certain selling stockholders.

The shares are expected to start trading on the Nasdaq under the symbol “CART” on Tuesday. The offering is expected to close on Sept. 21, 2023.

Why It Matters: Bloomberg previously reported citing people familiar with the matter, that Instacart is planning to sell shares for at least $30 per share. The report indicated the company could potentially price shares at $31 apiece.

The news came after Instacart on Friday raised its proposed range for its IPO from $26 to $28 per share to a new range of $28 to $30 per share, representing a valuation of up to $10 billion.

Instacart has been waiting to go public for several years. The company fetched a valuation of $39 billion in its last funding round following a boom in business driven by the pandemic. Sales jumped approximately 590% in 2020, per CNBC.

From Last Week: Instacart Mulls IPO Price Hike After Arm’s Stellar Debut: Targeting $10B Valuation

Renaissance Capital’s Matt Einhorn, who focuses on IPO research, noted that the valuation is reasonable and that the company hasn’t done anything wrong since its pandemic-fueled boom.

“That was just a different time,” he told CNBC.

The Renaissance Capital analyst compared Instacart to DoorDash Inc DASH, which made its public debut in late 2020. DoorDash shares closed around $190 per share after its first day of trading and closed Monday just shy of $81 per share.

In its most recent quarter, DoorDash posted revenue growth of 33% on a year-over-year basis. Instacart has projected that it will deliver more modest growth but better profitability. 

According to Einhorn, if Instacart can get back to sales growth of 18%, 2025 revenue would come in around $5.9 billion and EBITDA would be about $2.3 billion. 

“Including the cash on the company’s balance sheet, that values Instacart at about three times EBITDA – way below DoorDash’s valuation,” the CNBC report states. It is noteworthy that Instacart filed for its IPO as “Maplebear.”

Read Next: Why This DoorDash Analyst Is Turning Bullish, Upgrading Grocery Store Delivery App

Photo: Phillip Pessar from Flickr.

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