Instacart seeks to raise $660 million with boosted IPO range

New York: Instacart, the largest grocery-delivery business in the US, raised the price range for its upcoming initial public offering following a strong trading debut for chip designer Arm Holdings Plc.

The company and existing shareholders are now seeking to raise as much as $660 million, according to a filing on Friday. They are marketing 22 million shares at $28 to $30 apiece, up from a previously indicated range of $26 to $28 each, Instacart said in the filing.

The decision comes a day after SoftBank Group-owned Arm soared on its debut in New York, having priced its shares at the top of a range in the year’s biggest IPO. Instacart’s new target may value the company at anywhere from $9.3 billion to $9.9 billion based on the fully diluted equity listed in its filings.

Arm’s 25 per cent surge in the first day of trading is poised to help reopen the IPO markets after a dormant period for new deals. A number of other companies, including marketing and data automation provider Klaviyo and German footwear maker Birkenstock Holding, are lining up to sell shares in the US in the weeks ahead.

Founded in 2012, Instacart has been preparing to go public for years, hoping to capitalize on its pandemic star status and pole position in grocery delivery in the US. Instead, as the virus waned and investors weighed the prospect of higher interest rates, inflation and a potential recession, Instacart slashed its internal valuation three times last year to about $13 billion in October.

CEO Fidji Simo, who replaced Instacart co-founder Apoorva Mehta in 2021, will have to convince investors of her strategy to pivot the company to focus on grocery technology over grocery delivery, taking advantage of the voluminous amount of consumer data it collects to help grocery stores sell more.