Grocery startup Instacart sets terms for $616 million IPO

Instacart and its backers are seeking to raise as much as $616 million in what would be one of the biggest initial public offerings of the year, possibly opening the door to a rebound in U.S. listings.

The largest US online grocery delivery company will offer 14.1 million new shares for $26 to $28 each, it said in a filing Monday. Existing shareholders are selling 7.9 million shares at the same price.

Instacart is seeking a valuation of about $7.7 billion at the top end of the range based on the current number of shares outstanding in its IPO filing. That’s before taking into account the potential settlement of restricted stock units granted to employees, which could push the valuation higher.

While not finalized, the company’s valuation in the IPO marks a big drop from the pandemic-induced surge in business for Instacart. In 2021, it was valued at $39 billion, according to data provider PitchBook. As the pandemic waned and diners began to emerge from lockdowns and return to restaurants and grocery aisles, Instacart’s growth faded too, forcing it to slash its internal valuation three times last year to about $13 billion by October.

In conjunction with the IPO, PepsiCo Inc. is buying $175 million of its preferred convertible stock, Instacart said. The company is considering pricing its listing Sept. 19, with trading starting the following day, Bloomberg News has reported previously.

Instacart’s listing could help unstick the backlog of companies whose plans to go public have been stymied by the longest lull in US listings since the financial crisis in 2009. The largest of those companies is Arm Holdings Ltd., the semiconductor designer owned by SoftBank Group Corp. that is planning to raise as much as $4.87 billion later this week.

Others that have either already filed for IPOs or are pursuing them include marketing and data automation provider Klaviyo, Vietnam-based internet startup VNG Ltd. and footwear maker Birkenstock.

San Francisco-based Instacart, which is incorporated as Maplebear Inc. and filed under that name, saw its revenue grow 31% to about $1.5 billion for the six months ended June 30, aided by supercharged growth in its higher-margin advertising segment. It posted net income of $242 million for the first half of the year, compared with a loss of $74 million for the same period last year.

The company’s largest investors include Sequoia Capital and D1 Capital Partners, according to the filing. Other investors have included Tiger Global Management and Coatue Management, according to PitchBook.

Instacart’s IPO is being led by Goldman Sachs Group Inc. and JPMorgan Chase & Co., with Bank of America Corp., Barclays Plc and Citigroup Inc. also participating along with 15 other underwriters. The company plans for its shares to trade on the Nasdaq Global Select Market under the symbol CART.

With assistance from Katie Roof and Michael Hytha.