Instacart Seeks a $10B Valuation After ARM’s Successful IPO: Report
Instacart could be valued at $10 billion at its IPO as the company seeks to raise its target price following Arm's hot debut.
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Delivery firm Instacart is set to seek a higher initial public offering (IPO) target price range after Arm’s listing restored market optimism. Instacart wants to hike the target price to $28 – $30, which could value the business at almost $10 billion, as the Wall Street Journal (WSJ) reported on Friday.
Instacart to Raise IPO Target Range
According to a WSJ report, Instacart is expected to hike the target price for its long-awaited IPO after Arm’s successful public debut showed a resurgence in substantial interest in new listings. Per the report, the delivery company is set to file with the Securities and Exchange Commission (SEC) to raise the target price to $28 – $30 apiece, up from the previous range of $26 to $28.
As a result, the higher end of the new range would value Instacart at almost $10 billion on a fully diluted basis. While this represents a significant leap, the latest valuation range is still far from the $39 billion Instacart attained after its funding round in 2021, right before investors’ interest in startups plummeted.
The company has secured over $2 billion in venture capital (VC) financing across more than 19 rounds. The amended filing to raise the IPO price target could be issued as soon as Friday.
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Arm’s Successful Debut Brings Back IPO Market Optimism
The reports come just a day after Arm, a chipmaker owned by SoftBank, saw a successful IPO launch, with its share price jumping over 25% on the debut day. The notable surge propelled Arm’s market cap to roughly $65 billion on Thursday.
The UK-based company began trading in New York with 95.5 million shares, which opened trading at $56 apiece, 10% higher than the IPO price. The stock closed at $63.59, marking the largest IPO since Rivian’s in 2021.
The successful launch brought much-needed relief to startup investors and the broader IPO market, which has experienced a nearly 2-year drought due to record-high interest rates and the tepid performances of earlier IPOs. Interestingly, Arm is unlikely to be included in significant exchange-traded funds (ETFs).
In addition to Arm and Instacart, the public debut of marketing automation company Klaviyo is one of the three biggest IPOs scheduled for September. Klaviyo is seeking a fully-diluted valuation of up to $8.4 billion, it said on Monday.
Do you think Instacart will also attract strong interest from investors, akin to Arm? Let us know in the comments below.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
