Shares of Instacart skyrocketed Tuesday on its IPO debut, marking the second successful, high-profile offering after Arm’s Wall Street launch.
Shares for the grocery delivery app rose over 30% in early trading, near $40 per share after pricing at $30. The company is trading on the Nasdaq under the ticker CART.
After announcing an original price range of $26 to $28 per share, the company on Friday boosted the range to $28 to $30 to meet demand. Instacart’s valuation is now around $14 billion.
The IPO will net around $660 million, compared with the earlier target of $616 million. Despite the increased valuation, the total is just one-fourth of the $39 billion it was worth after its last funding round more than two years ago.
Instacart controls about 22% of the $132 billion U.S. online grocery-delivery market, according to Evercore. The company said it had 5.1 million users as of June 2023, up from 4.6 million in the year-ago period.
PepsiCo has also agreed to buy $175 million of the company’s preferred stock, while Goldman Sachs and JP Morgan are the lead underwriters for Instacart’s offering.
The deal, along with that of Arm Holdings, may help revive IPOs that have slowed due to inflationary pressures and the Federal Reserve’s 11 interest hikes since 2022. There were 181 deals in 2022, down from 1,035 in 2021, as tracked by Stock Analysis.