Instacart, the popular online grocery delivery service, is gearing up for a major milestone: its initial public offering (IPO). The company is hoping to raise an impressive $616 million in new funds, alongside contributions from its existing shareholders. This move could potentially value Instacart at a whopping $9.3 billion.
In simple terms, Instacart plans to sell its shares to the public for a price between $26 and $28 each. They’ll be offering a total of 22 million shares, with 14.1 million being brand-new shares from Instacart itself, and 7.9 million shares from people who already own them. If all goes well and they hit the higher price range, Instacart could secure around $616 million.
In the world of finance, the word “valuation” basically means figuring out how much a company is worth. Instacart is expected to be worth somewhere between $8.6 billion and $9.3 billion when it goes public. This calculation includes all the different types of shares they have, like those given to employees and others.
Instacart had previously announced that PepsiCo, the big food company, is also investing in them. PepsiCo is buying $175 million worth of Instacart shares as part of a private deal. Goldman Sachs, a company that helps with these kinds of transactions, will earn a fee equal to 1.5% of the total price of the shares sold in this deal.
Additionally, Instacart mentioned that Norges Bank Investment Management, a huge investment fund from Norway, wants to be a big investor in the IPO. Alongside other big investors like TCV, Sequoia Capital, D1 Capital Partners, and Valiant Capital Management, they’re thinking about buying up to about $400 million worth of Instacart shares during the IPO.
Just so you know, the exact amount of shares sold to these special investors can change. It all depends on what the people organizing the IPO and the investors themselves decide.
Instacart is a well-known online grocery delivery company in the United States. They’re going to be one of the biggest companies to go public this year. Instacart faces competition from regular grocery stores and also tech companies like Amazon, DoorDash, GoPuff, and Grubhub.
All of this news from Instacart is happening at the same time as another big event in the business world. A company called Arm, which designs computer chips, is getting ready to go public too. They could end up being worth as much as $52 billion, and they’re hoping to raise nearly $5 billion in their IPO.
These upcoming IPOs will be a big test for the stock market. There haven’t been many new companies going public recently because of some challenges like higher interest rates and prices going up. People are keeping a close eye on how Instacart, Arm, and others will do when they finally start selling their shares to the public.