Instacart is preparing to launch its initial public offering (IPO) in a move that is expected to value the online grocery delivery company at a significantly lower price than two years ago. The IPO is seen as a test for new tech listings and could potentially trigger more IPOs with lower valuations. Alongside the IPO wave, British chip designer Arm is also set to list this week with a valuation of up to $52bn, making it the largest listing of the year so far.
The IPO is seen as a critical gauge of Wall Street’s appetite for tech listings. While many observers are closely monitoring Arm’s listing, they believe that Instacart, with its lower valuation and status as a venture-backed tech start-up, is a better indicator of investor sentiment. If Instacart performs well, it may encourage other VC-backed companies to file for IPOs.
The valuation range for Instacart’s IPO is uncertain, with early discussions putting it between $8bn and $14bn. The lack of new listings in the market has contributed to this uncertainty. Only a small percentage (less than 10%) of Instacart shares will be offered in the IPO. Instacart has chosen not to comment on these details.
The IPO’s valuation will be a significant reduction for venture firms that invested at a $39bn valuation in 2021. Sequoia Capital and Khosla Ventures, two prominent venture firms, have invested heavily in Instacart and are still expected to profit from the IPO despite the decrease in valuation.
Instacart’s IPO is being closely watched by the market, as it represents a shift in sentiment towards grocery, delivery, logistics, and operations companies, which were previously popular but have fallen out of favor.
Given the challenging market environment, many start-ups have avoided raising fresh equity to prevent a valuation cut. If Instacart can successfully list at a lower valuation than its peak, it will set an important precedent for other IPO candidates. Klaviyo, a marketing automation company valued at $9.5bn, is also preparing for an IPO, making it another contender to test the public appetite.
Instacart’s IPO is being managed by Goldman Sachs and JPMorgan, and the company plans to list on Nasdaq under the ticker symbol CART.
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
