Dive Brief:

• Instacart announced Monday it plans to offer 22 million shares within an estimated price range of $26 to $28 per share, raising between $572 million to $616 million, per an S-1 form filed with the Securities and Exchange Commission. 
• The grocery technology company also disclosed in the filing that underwriters have the option to purchase 3.3 million additional shares from the company and that roughly 276 million — and up to 279.3 million — shares are outstanding. 
• On a fully diluted basis, the IPO would value Instacart between $8.6 billion and $9.3 billion. 

Dive Insight:

The new projected valuation of up to $9.3 billion puts Instacart well below its previous valuation estimates. 

A $265 million funding round in March 2021 more than doubled Instacart’s valuation to $39 billion. But the company chipped away at that figure in 2022 as its growth slowed, reportedly cutting its valuation by nearly 40% to $24 billion in March 2022, then to $15 billion that July and then for a third time to about $13 billion in October. 

Instacart, which intends to list stock on the Nasdaq under the symbol “CART,” is expected to begin trading shares next week, The Financial Times reported.

In the S-1 filed Monday, Instacart said it is planning to offer 14.1 million shares of common stock while stockholders will sell an additional 7.9 million shares. The 22 million shares the company plans to publicly trade are a fraction of the company’s overall shares. Instacart’s share count will total roughly 331 million on a fully diluted basis. 

Instacart said it is reserving 7 million shares for its 2023 Employee Stock Purchase Plan. Instacart also reiterated its agreement with PepsiCo for the CPG giant to buy $175 million of Instacart’s Series A stock. 

Sequoia and several other private backers, including Norges Bank, TCV, Valiant Capital and D1 Capital, plan to buy about $400 million of Instacart stock as “cornerstone investors,” per the new filing. The Financial Times noted that that purchase would be an unorthodox move, stating that venture capitalists tend to cash out early when a company they have invested in goes public. 

Instacart filed a confidential draft registration statement with the SEC for a potential IPO in May 2022. Over a year later, the company filed a preliminary prospectus for its plans to go public in August. 

Instacart recorded net income of $242 million during the first half of 2023, compared with a loss of $74 million during the same period in 2022, per the prospectus, which gave a first-time public look at the company’s financial standing. The company also disclosed it generated revenue of about $1.5 billion during the first six months of 2023, up 31% year over year.