Instacart will soon go public via initial public offering, with Nasdaq data indicating its stock will open Tuesday trading at $39 per share, keeping the momentum of the IPO market going despite opening at a far less rich valuation than the grocery delivery startup enjoyed during the height of the pandemic.
![The Cub bear waited to deliver bags of groceries via Instacart to a home in the 5900 block of Park Avenue Tuesday September 15, 2015 in Minneapolis, MN. ] Instacart is a grocery delivery service company that enables folks to food shop from home, and has t](https://specials-images.forbesimg.com/imageserve/6509b092faf94f3dd22250b8/The-Cub-bear-waited-to-deliver-bags-of-groceries-via-Instacart-to-a-home-in-the-5900/960x0.jpg?cropX1=222&cropX2=2250&cropY1=449&cropY2=1590)
Instacart's valuation on the public market is far below the $38.5 billion pre-money valuation it hit ... [+]
A $39 share price would be 30% above Instacart’s $30 IPO price set Monday.
That would send Instacart’s market capitalization to about $13 billion from its $9.9 billion initial valuation, a far cry from its $39 billion pre-money valuation reached during a March 2021 private funding round.
Instacart, which raised $660 million in its IPO, is the third-largest company to go public in 2023, trailing Kenvue, the Johnson & Johnson spinoff which IPOed in May, and Arm, the British chip designer which went public last week.
Founded in 2012, Instacart exploded in popularity during Covid-19 stay-at-home orders; its pre-money valuation soared from $7.5 billion in November 2018 to $17.5 billion in October 2020 before hitting near $40 billion in 2021, according to Crunchbase data. But internal valuations subsequently dwindled as consumer preferences changed, slipping to $24 billion last spring and $12 billion in April. The company brought in $1.5 billion in revenue and $242 million in net income during the first six months of 2023, according to a regulatory filing.
Public gig economy companies have slumped since 2021 after hitting all-time high share prices as the U.S. emerged from the worst of the pandemic: DoorDash is down about 70% from its 2021 peak, Uber is down about 25% and Lyft is down more than 80%.
How Instacart fares on the market after its first day. Other recent large IPOs have dropped considerably from their debut peaks, including Arm, which has seen its shares fall 4% or more over the last three trading sessions. Arm is down more than 20% since its first-day high and is up about 6% from its IPO price. Instacart upped its IPO share price range by nearly 10% last week on the back of Arm’s early success.