Instacart Increases IPO Price Range and Targets up to $9.9 Billion Valuation

Instacart is reportedly looking to raise $660 million in its upcoming initial public offering (IPO).

The grocery-delivery company decided to increase the price range for its shares following the successful trading debut of chip designer Arm Holdings, which has boosted confidence in new listings, Bloomberg reported Friday (Sept. 15). The company is preparing to price its IPO on Monday (Sept. 18), according to the report. 

Instacart and its existing shareholders are now marketing 22 million shares at $28 to $30 each, the company said in a Friday filing with the Securities and Exchange Commission (SEC). That’s up from the previously indicated range of $26 to $28 included in a Monday (Sept. 11) filing.

The adjustment could value the company between $9.3 billion and $9.9 billion based on its fully diluted equity, according to the Bloomberg report.

The IPO market has been relatively quiet lately, but Arm’s 25% surge on its first day of trading is expected to reinvigorate the market for new deals, the report said. Other companies, such as Klaviyo and Birkenstock, are also preparing to sell shares in the United States in the coming weeks.

Instacart, founded in 2012, has been planning to go public for some time, aiming to exploit its success during the pandemic and its dominant position in the U.S. grocery delivery market, per the report. However, the company faced challenges as the pandemic subsided and investors grew concerned about factors like higher interest rates, inflation and a possible recession. Consequently, Instacart’s internal valuation was reduced three times last year, dropping to around $13 billion in October.

Fidji Simo, the CEO of Instacart who took over from co-founder Apoorva Mehta in 2021, now needs to convince investors of her strategy to shift the company’s focus from grocery delivery to grocery technology, according to the report. Instacart plans to leverage the extensive consumer data it collects to assist grocery stores in boosting their sales.

Digital is playing a growing role in grocery, although the industry has been slower than others to shift to eCommerce, PYMNTS reported Tuesday (Sept. 12).

Instacart said in its filing with the SEC: “Grocery retail is characterized by diverse consumer behaviors, complex inventory management and fulfillment, lack of integrated omnichannel data, a shortage of technology that is custom-built for online grocery, a disaggregated supply chain, and a low operating margin.”

During the lead-up to its IPO, the company has boosted its in-store capabilities. New features include the option for grocers to provide an “In-Store mode” on their white-label apps, offering consumers a shopping list-building tool, store navigation assistance and information about products.