Following Instacart’s S-1 filing, investors and market analysts are keenly awaiting further news on next steps, anticipating a significant market debut. Given the likely size of the offering, it is also expected to revitalize the IPO market for tech-enabled companies, dormant since 2022.
With its pioneering online grocery delivery and pick-up service, being a best in breed connector of consumers and local stores, Instacart further capitalized on the new normal of post-COVID customer values. The forward thinking approach to convenience, operating on the back of a partnership model with over 500,000 retailers, allows customers to shop from multiple stores simultaneously to make grocery shopping more accessible for everyone.
Secondary Market Data
In 2021, like many private stocks, Instacart experienced a notable year. Its composite mid-price fluctuated between roughly $80 and peaked at $133. However, by May 2022, there was a shift. Instacart's shares began a decline in the private market, dropping to a composite mid-price of about $106.
Once Dec 2022 came along, institutional secondary market activity suggested an even greater drop with a composite price of around $40, or a $13.97b valuation.
Interestingly, Instacart's latest composite mid-price of about $38.26 represents only a slight 6% discount compared to the valuation by many mutual funds at the close of Q1/Q2 2023.
1940 Act Fund Filings
Following Instacart’s Series I in Feb ‘21, a number of funds, namely a few of Fidelity’s funds and Variable Insurance Products funds, valued their shares in line with the round at around $125, or a ~$39B valuation, until around Aug ‘21.
Since that summer, Instacart’s public fund shareholders value their positions at a significant discount to ‘21 highs, almost a 65% discount from Oct ‘21 to Jan ‘23, where it hovers around now at ~$38.26 / $12.5B valuation.
Anticipating a September IPO for Instacart
Interestingly, ApeVue’s composite prices have historically averaged a relative 7.88% discount to funding rounds. This calculation utilizes ApeVue’s Composite Prices on a T-1 basis to share prices of reported non-IPO financing rounds.
If Instacart had a hypothetical “Series J” tomorrow, adjusting the current composite’s implied valuation of $13.36b for pre-round discounts, ApeVue data would suggest a listing price with a $14.42b valuation. An IPO should list higher.
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