What was changed
Instacart had raised $2.9 billion from venture investors, peaking at a $39 billion valuation in 2021 before cutting its internal valuation multiple times to $13 billion as pandemic-era demand faded. After nearly two years without a major VC-backed IPO, the company’s leadership faced the dilemma of waiting for market conditions to improve or pursuing a public listing to provide liquidity to employees and investors.
In September 2023, Instacart priced its IPO and saw its shares rise 12% on the first day of trading on Nasdaq, giving the company a market value of about $11 billion. The successful debut ended a prolonged IPO drought for venture-backed startups and signaled renewed investor appetite for late-stage tech offerings, encouraging peers to reconsider their own public-market plans.
What it achieved
Instacart’s shares opened 12% above the reference price, valuing the company at about $11 billion and marking the first major VC-backed IPO since late 2021.
Why it worked
Market conditions had improved after a two-year IPO hiatus, reducing the risk of a poor reception.
The company’s valuation had been adjusted downward to more realistic levels, making a public offering attractive to both investors and employees.
Going public would provide liquidity for early employees and investors while giving Instacart a currency for future acquisitions.
What can be applied
Timing a public offering when market windows reopen can provide liquidity and restore confidence, even after prolonged private-market downturns.
Aftermath
Following its debut, Instacart’s stock traded within a narrow range around the $11 billion mark, and the company began using its publicly traded shares as acquisition currency, purchasing smaller logistics and AI startups to strengthen its platform. The successful IPO also revived interest in late-stage venture-backed offerings, prompting peers such as Klaviyo and Turo to dust off their own registration statements, while Instacart continued to focus on profitability and expansion of its grocery delivery network.
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