After a couple of down years, IPO excitement is back in the air. Last week, Arm Holdings went public in one of the highest-profile offerings of the past few years.
Up next is Maplebear, better known as the grocery delivery service Instacart, which is perhaps the most anticipated IPO of the year for a consumer-facing brand.
On the heels of Arm’s successful IPO—shares jumped around 25% after trading started—Instacart raised its potential listing price in an updated filing to the Securities and Exchange Commission (SEC) on Friday. Shares are expected to hit the Nasdaq exchange on Tuesday and will trade under the “CART” ticker.
The filing indicates that shares are expected to be priced between $28 and $30 each, an increase from between $26 and $28, which could mean a total valuation of almost $10 billion. That’s down from a valuation of $39 billion reached during a 2021 fundraising round.
So for investors who have been waiting for Instacart shares to start publicly trading, Tuesday looks to be the big day. And there are a few reasons gleaned from its S-1 to suspect that shares could catch fire on Tuesday.
For one, Instacart is profitable, having brought in $114 million in net income during the second quarter of 2023 on revenue of $716 million, and profits grew from $73 million in 2021 to $428 million in 2022. The company also has some big backers, headlined by PepsiCo agreeing to purchase $175 million in stock in a private placement. Meanwhile, Instacart has been leaning heavily into AI features in an effort to become more efficient—incorporating an “Ask Instacart” feature, for example, and experimenting with smart shopping carts for another—that may also capture investors’ interest.
In a broader sense, Instacart’s IPO will be another interesting test case for the markets. While the S&P 500 is up more than 16% year-to-date, there’s still pervasive pessimism about the overall strength of the economy. That’s one of the reasons that there have been relatively few high-profile IPOs over the past year or two.
However, given the success this year of IPOs from companies such as Cava Group and, most recently, Arm, an explosive market debut for Instacart could add more credence to the idea that this sentiment is turning around.