Instacart Boosts IPO Price Range, Aims for $10 Billion Valuation Amid Robust Investor Demand

Instacart, the popular grocery delivery app, has raised the proposed price range for its upcoming initial public offering (IPO), aiming for a fully-diluted valuation of up to $10 billion. This move comes on the heels of a successful IPO debut by Arm Holdings, signaling strong investor demand for Instacart's shares. After years of anticipation, Instacart is finally preparing to list its shares this month.

The IPO market in September is experiencing a flurry of activity, with several notable companies going public. SoftBank Group's chip designer, Arm, saw its shares rise by 34% in premarket trading following a 25% gain on its first day of trading. This strong performance has heightened expectations for other upcoming IPOs, including Instacart.

Instacart has revised its offering to include 22 million shares priced between $28 and $30 each, up from its previous target range of $26 to $28 per share. At the top end of the range, the IPO could raise $660 million, compared to the initial goal of $616 million. However, this new valuation target is still significantly lower than the company's valuation of $39 billion from its last funding round over two years ago.

Cornerstone investors have expressed their intent to purchase up to $400 million worth of shares in the IPO, potentially accounting for around two-thirds of the total proceeds if the shares are priced at the upper end of the range. Additionally, PepsiCo has committed to buying $175 million worth of Instacart's preferred stock.

Goldman Sachs and J.P. Morgan are serving as the lead underwriters for Instacart's IPO, further emphasizing the high level of interest and support from the investment community.

Instacart's decision to increase its price range and valuation target underscores the strong demand for its shares and sets the stage for what could be a highly successful IPO. As September continues to witness a flurry of new listings, the performance of Instacart and other companies will be closely watched to gauge the overall health and appetite of the IPO market.