Grocery delivery app Instacart set a target valuation well below its previous funding round in 2021, a sign that companies are treading cautiously as they assess investor interest in new offerings.
The San Francisco-based company said Monday that it will price its shares between $26 and $28 per share. Instacart said it had 279 million shares outstanding as of Aug. 15. Including stock options and restricted stock units of 20.45 million and 31.47 million, respectively, the total stock for valuing the company is 331 million shares.
This gives it a valuation of between $8.6 billion and $9.3 billion, well below the $39 billion valuation set in a 2021 fundraising round. The company’s internal valuation was $24 billion in March last year and was reduced to $15 billion in July to reflect a selloff in technology stocks, a person familiar with the matter had told Barron’s.
Maplebear, better known as Instacart, filed to go public on August 25 and listed under the ticker symbol CART. Instacart, British chip designer Arm and automation platform Klaviyo are all setting the stage for a wave of IPOs that investors believe could take place in the coming months – possibly with lower stock valuations than they have previously achieved. Arm debuts this week and said the IPO could raise up to $4.87 billion in fresh capital.
The IPO market is not doing particularly well. According to data from Ernst & Young, there were 615 IPOs worldwide in the first half of this year, down 5% year-on-year, and capital raised from these deals fell 36% year-on-year.
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Some of the blame could be attributed to high interest rates and uncertain economic conditions that have caused investors to abandon new listings. Online mortgage lender Better.com, which went public and merged with a special-purpose acquisition company, closed its first day of trading on Aug. 24 at $1.15, down 93% from its previous closing price of 17.45 US dollars when the SPAC was still traded on the stock exchange.
Instacart, founded in 2012, allows independent contractors to browse orders and select a shopper whose order they would like to fulfill. This became more important as Americans avoided visiting stores during Covid-19 lockdowns.
Write to Karishma Vanjani at [email protected].
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