Instacart had a successful IPO and closed the day 12% higher, reeling in $420 million in cash from the Nasdaq offering.
American grocery delivery companyย Instacart (NASDAQ: CART) has finally concluded its initial public offering (IPO) on the Nasdaq, closing 12% higher on the day. The companyโs stock, in after-hours trading, is exchanging hands at $32.95, 2.23% down from its $33.70 close.
The Instacart IPO saw the companyโs shares initially spiking 40% to open at $42 but eventually lost some of the gains. As of Monday, Instacartโs valuation was at $10 billion, fully diluted, at $30 per share. This is a considerable reduction from the $39 billion valuation recorded in early 2021 during the Covid-19 pandemic.
Officially known as Maplebear Inc, Instacart boostedย its proposed price range last week following anย impressive Arm Holdings debut. Media reports stated that the company increased the range to $28 to $30, from $26 to $28 per share.
The Instacart offering saw the company float only 8% of its outstanding shares. 36% of the shares floated were sold by existing shareholders. Reportedly, company co-founders Maxwell Mullen and Brandon Leonardo are selling 1.5 million shares each. Another co-founder, Apoorva Mehta, is selling 700,000. Furthermore, former employees are selling an aggregate of 3.2 million shares.
Founded in 2012, Instacart delivers groceries to its teaming customers from several retail and multi-department stores, including Costco, Kroger, and Wegmans. During the pandemic, Instacart achieved considerable success because of the pandemic lockdowns. In 2021, the company successfully raised funds from venture firms Andreessen Horowitz and Sequoia Capital at $125 per share. The funding round also saw participation from T. Rowe Price and Fidelity.
Instacart IPO Follows Multiple Funding Rounds Over the Past Few Years
In 2020,ย Instacart raised $200 millionย from existing investors D1 Capital Partners and Valiant Peregrine Fund. The funding round took the companyโs market capitalization to $17.7 billion at the time. Instacart said in anย official announcementย that it planned to use the funds to develop new products and also introduce new features to improve customer experience.
In the yearโs second quarter, Instacart raised revenue to $716 million, increasing 15%. However, this was a significant reduction from the 40% increase recorded for the same period last year. Unfortunately, both increases were nowhere near the nearly 600% rise during the pandemic.
Speaking on the IPO, Instacart CEO Fidji Simo said the listing was to provide employees with stock access to the company. Simo said:
โWe felt that it was really important to give our employees liquidity. This IPO is not about raising money for us. Itโs really about making sure that all employees can have liquidity on stocks that they work very hard for. We werenโt looking for a perfect market window.โ
Last year, Instacart joined several other companies in retrenching andย cutting jobs, supposedly to reduce costs. The job cuts came shortly after the companyโs mid-year performance review, and directly affected several members of staff. Instacart reportedly cut more than a few low-level employees and some at the senior level. The retrenchment did not affect any top executives.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
