Instacart has made its initial public offering (IPO), pricing its stock at $30 per share and valuing the grocery delivery and technology company at approximately $10 billion. Instacart, which will trade on the NASDAQ under the symbol “CART,” sold 22 million shares in the IPO, with 14.1 million coming from the company and 7.9 million from existing shareholders. The share price jumped in the IPO’s debut to $42, according to the Wall Street Journal.
The IPO valuation represents a significant decline from early 2021, at the height of the COVID pandemic, when Instacart raised funding at a $39 billion valuation. The market for tech company IPOs has been quiet since December 2021 due to the combination of inflation and rising interest rates, which have led investors to reduce their risk and caused price drops in internet and software stocks, according to CNBC.
In a letter announcing the IPO, CEO Fidji Simo characterized Instacart as a “grocery technology company,” writing: “Retailers understand that we invest more in technology custom-built for online grocery than any single grocery could — and that by partnering with Instacart, they can have the same technology edge as tech giants and startups, while also being able to focus on everything else it takes to run a successful business.”
Earlier this month, Instacart added new AI features and in-store engagement opportunities to its suite of solutions. In addition to a recent partnership with Aldi, Instacart also moved beyond the grocery space by working with PetSmart.
Instacart works with more than 1,400 retail banners across 80,000+ stores, representing more than 85% of the U.S. grocery industry, according to the company’s SEC filing. Simo’s letter identified the key technologies Instacart offers, including:
- Multiple fulfillment options that allow consumers to get an order in minutes, hours or the following day, enabled by its picking technology and “community of dedicated shoppers who treat every order like their own”;
- In-store technologies including AI-powered smart carts, mobile checkout and electronic shelf tags;
- Advertising that enables CPG brands to reach customers at the point of purchase and within minutes of delivery, creating new revenue streams for retailers; and
- Data, insights and analytical tools to help retailers optimize operations, reduce costs and make optimal strategic decisions.