Instacart IPO price gets a boost ahead of stock listing day

Grocery delivery service Instacart has raised the proposed price range for its initial public offering (IPO).

Shares will be offered at an estimated range of $28 to $30, the company said Friday in a filing with the Securities and Exchange Commission (SEC), which would value the company at up to $10 billion on a fully diluted basis. As the Financial Times first reported, the range marks an increase of about 7% from a previous estimate.

The company is selling a total of 22 million shares. As part of the deal, PepsiCo has also agreed to buy $175 million of Instacart’s Series A redeemable convertible preferred stock.

The move to increase the price was in part due to the success of British chip designer Arm’s debut on the Nasdaq exchange on Thursday, FT reports. Shares of the SoftBank-owned company rose 25% during its first day of trading, landing at around $63. The stock was up again in early trading on Friday. 

Instacart had previously been looking for $26 to $28 per share, which would equate to a slightly lower $9.3 billion value for the company. 

FT spoke with bankers working on both the Arm and Instacart deals, who said they had been cautious in setting their pricing terms to ensure the deal went well. One source told the paper that the company was “encouraged” by Arm’s reception in the market. We’ve reached out to Instacart for additional comment and will update this post if we hear back.

Instacart has been preparing for an IPO for years, hoping to capitalize on its pandemic popularity. However, higher interest rates, inflation, and a possible recession dashed the company’s plans and caused it to drop its internal valuation three separate times last year, ultimately landing at around $13 billion in October of 2022.

The service currently works with over 1,400 retailers across 80,000 store locations, including large chains such as Safeway, Costco, and Kroger. The company processed more than 260 million orders last year.

Shares are expected to list on the Nasdaq next week.