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Instacart filed for an initial public offering on the Nasdaq exchange on Friday, as the U.S. online grocery delivery company prepares its shares to begin trading next month.
The public market debut of San Francisco-based Instacart is expected to add momentum to an improving IPO market. Meanwhile, British chip designer Arm is preparing for its biggest listing of the year in September. Klaviyo, a marketing automation company valued by venture capitalists at $9.5 billion, also filed for an IPO on Friday.
The listings will provide a gauge of investor sentiment after two years of volatile markets for technology companies.
Instacart said it had acquired Norway’s sovereign wealth fund Norges Bank and venture capital firms TCV, Sequoia Capital, D1 Capital Partners and Valiant Capital as cornerstone investors, buying about $400 million in shares, according to documents.
It also agreed to privately place $175 million worth of stock in PepsiCo, which will be converted at the time of the IPO.
Instacart has been heavily impacted by changes in shopping habits during and after the pandemic, as well as wild swings in tech start-up valuations. Its valuation soared from $14 billion in 2020 to a peak of $39 billion a year later as sales boomed and venture capitalists scrambled for support. But sales slowed last year as people returned to grocery stores, and the company faces stiff competition from other on-demand delivery startups like Gopuff.
Instacart lowered its internal valuation, which is used to assess the value of employee stock options, in May to $12 billion, according to people with direct knowledge of the company’s financial details.
The company disclosed that its earnings have improved, from a net loss of $74 million in the first half of 2022 to a net income of $242 million in the first half of this year. Total revenue for the first half of 2023 rose 31% from a year earlier to $1.48 billion.
However, Instacart warned in its filing that the company has a history of losses and “may not be able to sustain profitability.”
Instacart, one of dozens of late-stage tech start-ups, first expressed interest in a filing last May but delayed plans due to market conditions.
It has raised more than $2.7 billion from investors including Tiger Global, Khosla Ventures and Sequoia Capital. Goldman Sachs and JPMorgan Chase and Bank of America and Barclays are serving as lead advisors.