Fintech & e-commerce IPO Public Markets

Instacart Shares Close Up 12% In Nasdaq Debut, Marking First Major VC-Backed IPO Since 2021

Illustration of grocery delivery overlaid on street map.

Shares of grocery delivery company Instacart closed up 12% in their first day of trading on the Nasdaq on Tuesday, valuing the company at about $11 billion. The offering follows chip designer Arm Holdingslisting last week and marks the first major venture-backed startup IPO since late 2021.

Instacart shares had climbed as high as 40% from their initial price before subsiding as the day wore on. Still, the modestly successful offering could prompt other late-stage startups to dust off listing plans after a nearly two-year IPO pause.

Instacart has been around for a decade and has raised some $2.9 billion from venture investors. Its largest shareholder is Sequoia Capital, with a 15% fully diluted stake. Co-founder and former CEO Apoorva Mehta owns shares worth about $800 million, according to filings. Other venture investors in Instacart, according to Crunchbase, include D1 Capital Partners, Andreessen Horowitz, Kleiner Perkins, Coatue and Tiger Global Management.

Instacart is one of more than 1,400 highly valued unicorn startups that have collectively raised nearly $900 billion from venture investors. The grocery platform’s trajectory illustrates the rocky path that late-stage startups have traversed in recent years. It raised its most recent funding in 2021, at the height of the funding boom, at a lofty $39 billion valuation. But as pandemic-era consumer spending patterns fade, Instacart cut its internal valuation multiple times, most recently slashing it to $13 billion.

Still, its public-market debut could restore investor confidence in new tech offerings, reviving the late-stage funding market and prompting more highly valued startups to venture onto the public markets. 

Other startups that could go public soon include marketing tech firm Klaviyo, which aims to go public this month as well, and peer-to-peer car rental platform Turo, which recently submitted updated IPO plans. All eyes will also be on companies like corporate travel platform Navan (formerly TripActions) and online discussion forum Reddit that filed IPO plans in 2021 or 2022, before the market stalled, to see if they resurrect those filings.

Instacart’s performance on the Nasdaq will be particularly closely watched, given that many of 2021’s IPOs have not gone on to great success as public companies — close to half of the 171 companies that went public in 2021 at billion-dollar-plus valuations and that are still trading are now worth less than $500 million, according to a recent analysis of The Crunchbase Billion-Dollar Exits Board.

The few companies that have ventured onto the public markets this year have also posted a very mixed track record. They include Arm, which posted a 25% gain on its first day of trading, but has since fizzled.

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Illustration: Dom Guzman

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