US grocery delivery company Instacart files for IPO

Receive free Instacart Inc updates

We’ll send you a myFT Daily Digest email rounding up the latest Instacart Inc news every morning.

Instacart filed for an initial public offering on the Nasdaq exchange on Friday as the US online grocery-delivery company prepares for its shares to begin trading next month.

The public-market debut by San Francisco-based Instacart is expected to add momentum to an improving IPO market. It comes as Arm, the British chip designer, is also gearing up for what is set to be the year’s largest listing in September. Marketing automation company Klaviyo, which is valued by venture investors at $9.5bn, also filed for an IPO on Friday.

The listings will provide a gauge of investor sentiment after two years of turbulent markets for technology companies.

Instacart said it had secured Norges Bank, a Norwegian sovereign wealth fund, and venture capital firms including TCV, Sequoia Capital, D1 Capital Partners and Valiant Capital as cornerstone investors, purchasing about $400mn of its stock, according to the filing.

It has also agreed a private placement of $175mn worth of shares with PepsiCo, which will convert at the IPO.

Instacart has been highly exposed to shifts in shopping habits during and after the pandemic, as well as large swings in valuations for tech start-ups. Its valuation soared from $14bn in 2020 to a peak of $39bn a year later, as sales boomed and venture capitalists rushed to back it. But sales slowed last year as people returned to grocery stores, and the company faced tough competition from other instant delivery start-ups such as Gopuff.

Instacart cut its internal valuation — used to value employees’ stock options — to $12bn in May, according to people with direct knowledge of the company’s financial details.

It disclosed that its earnings had improved, from a net loss of $74mn in the first half of 2022 to net income of $242mn in the first half of this year. Total revenue grew 31 per cent in the first half of 2023 compared with the previous period, to $1.48bn.

However, Instacart warned in its filing that it had a history of losses and “may be unable to sustain profitability”.

Instacart first signalled its intention to list in a filing last May, but was one of dozens of late-stage tech start-ups that delayed their plans due to market conditions.

It has raised more than $2.7bn from investors such as Tiger Global, Khosla Ventures and Sequoia Capital. Goldman Sachs and JPMorgan are lead advisers, alongside Bank of America and Barclays.