Instacart targets IPO price of $26 to $28

Grocery technology company Instacart revealed early Monday that it is looking to raise up to $616 million through its initial public offering of 22 million shares priced between $26 and $28, according to its updated Securities and Exchange Commission filing.

Instacart is slated to trade on Nasdaq under the ticker symbol “CART.”

After a year of stops and starts, Instacart submitted its IPO registration on Aug. 25, noting that it sees a “massive digital transformation” happening in the grocery industry.

The San Francisco-based tech firm, founded in 2012, reported $2.2 billion in gross profit on 263 million orders for the 12 months ended June 30 and said it is active at 80,000 stores, representing 1,400 retail banners—85% of the U.S. grocery market.

In the prospectus, Instacart CEO Fidji Simo ­­said she sees tremendous potential for growth in digital grocery sales since only 12% of purchases today are made online

“We believe the future of grocery won’t be about choosing between shopping online and in-store,” Simo wrote. “Most of us are going to do both. So, we want to create a truly omnichannel experience that brings the best of the online shopping experience to physical stores, and vice versa … If the neighborhood grocer who has been serving their community for decades can’t find an edge, they may not be able to keep up. That’s where we come in.”

MORE: An Instacart timeline, from startup to IPO

Instacart admitted, however, that demand for its business model exploded during the pandemic’s early days and that changes in consumer behavior coupled with rising inflation and interest rates could threaten its success.

Plus, Instacart said it has “only recently begun generating profit,” bringing in a net income of $428 million for the year ended Dec. 31—the majority of that thanks to a tax benefit. In the years before, Instacart lost $70 million and $73 million, respectively, and tallied $997 million in losses as of the end of last year.

Instacart’s path to IPO has been a bumpy one. The tech company confidentially filed go-public forms with the SEC in May 2022, but less than six months later, Simo shelved those plans. She said at the time that the turbulent stock market was inhospitable to tech IPOs.

Instacart’s valuation has also taken a rollercoaster ride in recent years, plummeting from as much as $40 billion to $13 billion shortly before its IPO filing, according to published reports.

The Wall Street Journal on Sunday reported that Instacart is targeting a valuation of $8.6 billion to $9.3 billion via its IPO.

“The expected valuation, on a fully diluted basis, is a far cry from the roughly $39 billion Instacart garnered in a fundraising round in 2021, the year it started laying the groundwork for a public listing,” the report said. “Since then, valuations of high-growth startups have fallen as interest rates rose, making riskier investments less attractive.”