Instacart IPO PreVue through Secondary Market Activity

The Instacart IPO should be valued at a premium to secondary market levels, which today imply the company is worth $13.36 billion USD (based on the latest ApeVue composite stock price).

September 5, 2023

Hill Chart Shape

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.

Pre/Post - COVID Dynamics: Gross Transaction Value of the products sold through Instacart grew at 303% from 2019-2020, but has since slowed to 16% from 2021-2022.  EBITDA Reported for 31-Dec-22 was $187-million (compared to -$454-million loss ending 2019)

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.

About Us: ApeVue provides objective, daily pricing for non-public company stocks. Our independent data help institutional investors understand market conditions, measure risk and assign valuations with confidence. Price data from ApeVue are constructed from aggregated, anonymized market activity information sourced from licensed brokers at the nexus of institutional trading. Unlike traditional company valuation assessments done quarterly, ApeVue data show equity price fluctuations between funding rounds and regular financial reporting periods. With the largest, most timely, independent dataset covering non-listed companies, ApeVue is the best source for up-to-date insights about the dynamic pre-IPO company market.



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