Instacart, a grocery delivery company known as the "American version of Market Kurly," showed double-digit gains on its first day of trading on the New York Stock Exchange on the 19th (local time). Following the successful listing of UK semiconductor design company ARM on the 14th, Instacart's successful IPO is expected to act as a signal of rebound in the frozen initial public offering (IPO) market. The marketing automation platform Klaviyo is scheduled to go public the next day.
Instacart, which was listed on Nasdaq that day, closed at $33.70 per share, up 12.33% from the offering price of $30. Instacart opened at $42 per share, more than 40% above the offering price, but later narrowed its gains.
The market capitalization is estimated at $11 billion. This is below the company valuation of $39 billion estimated in early 2021 during the height of the pandemic. However, it is higher than the market's expectations for this listing. Instacart raised $660 million through this IPO. Major investors include Sequoia Capital and D1 Capital Partners.
Founded in 2012, Instacart receives customer orders and delivers groceries from more than 80,000 retail chain stores across the U.S., including Kroger and Costco. In the second quarter of this year, it recorded a net profit of $114 million. The online sales portion of Instacart's grocery market is about 12%. Advertising revenue, which Instacart cites as a growth driver, accounts for 28% of total sales. Fidji Simo, CEO of Instacart, said, "(Instacart is) at the center of a large-scale digital transformation," adding, "The more people shop online in the future, the more than double our online dominance can grow," expressing confidence in growth.
Following the listing of ARM, the biggest IPO in the New York Stock Exchange in the second half of this year, Instacart's successful listing has increased expectations for the IPO market. Bloomberg reported, "Instacart surged as much as 43% intraday on its first day of trading, adding momentum to the IPO market rebound," and added, "The successful IPO of startup Instacart, backed by venture capital, could open the market for other companies." The Wall Street Journal (WSJ) also reported it as a "signal of the IPO market awakening again." ARM, which debuted on Nasdaq last week, surged 25% on its first day but has since narrowed its gains.
Investors are paying attention to Klaviyo, which is going public the next day. Klaviyo will set its offering price that day. Bloomberg, citing sources, predicted that Klaviyo's offering price will be set between $29 and $30 per share. German shoe manufacturer Birkenstock and Vietnam-based internet startup VNG are also preparing to list on the New York Stock Exchange.
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