Instacart’s $900m IPO meets goal with market rebound

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NEW YORK - Grocery delivery business Instacart priced its initial public offering (IPO) at the top of a marketed range to raise US$660 million (S$900 million) in the second marquee listing in a week.

The San Francisco-based company sold 22 million shares for US$30 each on Monday. Instacart and current shareholders had offered the shares for US$28 to US$30, a range that was elevated after chip designer Arm Holdings rose 25 per cent in its trading debut on Thursday after the year’s biggest IPO.

At the IPO price, Instacart has a fully diluted valuation of US$9.9 billion. That’s a steep plunge from its US$39 billion valuation in a 2021 funding round when its business boomed amid Covid-19 lockdowns, but still ranks it as one of the biggest companies to go public this year.

Instacart’s listing combined with Arm’s is also giving equity capital markets much-needed relief after the longest drought since 2009 in the depths of the financial crisis. As a venture-backed consumer start-up, success in its trading debut could pry open the IPO market for other companies looking to go public.

Marketing and data automation provider Klaviyo is planning to sell its shares on Tuesday, with German footwear maker Birkenstock Holding also preparing to list.

Even with Instacart’s IPO and Arm’s US$5.23 billion listing, which now includes so-called greenshoe shares, only about US$21 billion has been raised this year on US exchanges, according to data compiled by Bloomberg. That’s finally catching up with the US$22 billion at this point last year but still less than a 10th of the US$250 billion total for the period in a record-setting 2021, the data show.

Founded in 2012, Instacart has faced a rapid slowdown in the growth of its core business in the wake of the pandemic and has been searching for new ways to make money.

Orders on its platform rose 18 per cent to almost 263 million in 2022 but were virtually flat in the first half of 2023 compa...

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