FALMOUTH, MA – APRIL 8: Instacart shopper Loralyn Geggatt makes a delivery to a customer’s home during the COVID-19 pandemic in Falmouth, MA on April 7, 2020. Some Amazon, Instacart and other workers protested for better wages, hazard pay and sick time. (Photo by David L. Ryan/The Boston Globe via Getty Images)
Instacart on Monday submitted an updated filing for its upcoming initial public offering, saying it is looking to raise up to $616 million of fresh capital alongside existing shareholders at a valuation of as much as $7.7 billion.
In the filing, Instacart said it is setting an offer price of between $26 and $28 for its IPO. Instacart said it would issue 22 million shares in total, comprising 14.1 million of newly issued shares from the company and 7.9 million shares from selling stockholders. At the higher end of that pricing scale, Instacart will be looking to net roughly $616 million in proceeds.
Instacart said its total common stock outstanding will be 276 million shares or 279.3 million if underwriters exercise an option to purchase additional shares. At 276 million shares total, Instacart will likely secure a valuation of about $7.7 billion. If underwriters choose to buy more shares, that could raise the firm’s valuation to $7.8 billion.
Instacart previously said that multinational food giant PepsiCo would come on board as an investor in the company, purchasing $175 million of shares in a concurrent private placement. Goldman Sachs, one of the underwriters, will act as an agent in connection with the private placement and receive a fee equal to 1.5% of the total purchase price of shares sold.
Instacart said in its filing that Norges Bank Investment Management, Norway’s massive sovereign wealth fund, had also expressed interest in becoming a cornerstone investor in the firm’s IPO. Alongside TCV, Sequoia Capital, D1 Capital Partners, and Valiant Capital Management, the fund would purchase up to roughly $400 million in the offering.
However, underwriters “could determine to sell more, fewer, or no shares to any of the cornerstone investors, and any of the cornerstone investors could determine to purchase more, fewer, or no shares in this offering,” Instacart added.
Instacart, one of the largest U.S. online grocery delivery firms, will be among the biggest public flotations to take place this year. The company competes with traditional retailers, as well as tech firms like Amazon, DoorDash, GoPuff, and Grubhub.
The company’s updated IPO filing comes as British chip design firm Arm prepares for a blockbuster debut that could value it at as much as $52 billion. Last week, Arm said the New York IPO could fetch it up to $4.87 billion in fresh capital.
The debuts will put the IPO market to the test after a year-long freeze on stock market listings as a result of higher interest rates and rising inflation. Investors are hoping for a good showing from the latest raft of public offerings — but performance will depend heavily on market conditions when the companies actually list.