Instacart Targets Less Than $10B Valuation In Upcoming IPO, Significantly Lower Than Previous Funding Round

Online grocery delivery company, Instacart, is striving for a valuation between $8.6 billion to $9.3 billion in its forthcoming IPO, a significant decline from its previous worth, The Wall Street Journal reported.

Instacart is slated to kick off marketing for its IPO as early as Monday, with the planned valuation range to be revealed at that time.

The shares are anticipated to start trading on the Nasdaq exchange the following week under the ticker ‘CART’. However, the San Francisco-based company’s plans could still be adjusted based on feedback during the roadshow.

The IPO valuation, calculated on a fully diluted basis, is a stark contrast to the nearly $39 billion Instacart secured in a 2021 fundraising round. The decrease reflects a broader trend of falling valuations for high-growth startups, amidst rising interest rates and waning attraction to riskier investments.

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Instacart’s stock-market debut will serve as a key indicator for the IPO market, which has been relatively subdued for much of this year and last. The company’s entry follows the much-awaited offering by British chip designer Arm Ltd.

Despite a slowdown in its core delivery business, Instacart saw a 31% increase in revenue to $1.5 billion, while advertising and other businesses boosted the revenue by about 24% in the same period.

Instacart’s CEO, Fidji Simo, a former Meta Platforms executive, has been concentrating on expanding the delivery business and diversifying into areas like advertising and technology services.

The company does not plan to raise much money for itself in the offering and much of the selling will be done by employees and other early stakeholders.

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