Instacart IPO: what you need to know and how to buy shares

When could the Instacart IPO happen?

Instacart has just announced its intent to launch its initial public offering (IPO) on the NASDAQ, on September 18 this year.

The company initially planned to launch back in 2021 but this was postponed due to market volatility.

What does Instacart do?

Instacart is a grocery delivery and pick-up company based in the United States. Customers order from one of Instacart’s partner retailers through its website or mobile app and receive goods within 2-5 hours.

Founded in 2012 by former Blackberry, Qualcomm, and Amazon engineer Apoorva Mehta, the company is working to develop the smart shopping of the future and has begun to integrate machine learning and AI features into the platform. This includes a smart AI trolley with computer vision that recognises products as they are added, charging shoppers automatically for purchases.

Who are Instacart’s competitors?

With a very similar business model, arguably Instacart’s biggest competitor is Amazon Fresh. Its decision to buy Whole Foods back in 2017 was seen as a major threat to Instacart, but it seems to have had little effect. This is most likely due to Instacart’s ability to appeal more to the brick-and-mortar retail providers than Amazon.¹

Both companies saw a significant increase in sales during the pandemic, which has since tailed off. Other competitors such as Uber Eats, Door Dash, and even new start-ups such as Jokr and Gorillas also pose a threat. To overcome this, Instacart has increased its product offering which is reflected in its most recent rebrand.

Despite the increased competition within the online grocery sector, Instacart’s market share has remained stable, at just over 21% since 2020. This is the third largest in the entire sector, below Walmart and Amazon.²

See more upcoming IPOs

What's Instacart valued at and what could the share price be?

The company’s most recent market valuation back in December 2022 was around $10 billion, down from $24 billion in May that year.

They've priced their IPO at $30 a share, where 22 million shares will be available.

What’s the outlook for the Instacart IPO?

For the most part, investor sentiment around Instacart’s IPO remains cautious. Economic instability has resulted in a very quiet IPO market and Instacart is set to be the first venture-backed tech company to launch in nearly 2 years.

Its significant drop in valuation from $39 billion back in 2021 to around £10 billion in December last year, is also another reason for concern.

That said, PepsiCo has agreed to buy $175 million worth of Instacart’s Series A preferred stock, and the company’s continuous net profit for the past 5 quarters may indicate a potential success, but this is far from guaranteed.

Instacart IPO: how to buy shares

We’ll offer Instacart stock on the day they list.

You can buy and own Instacart shares with us from zero commission using our share dealing account.

To speculate on the Instacart share price, you can use our spread betting account or CFD trading account.

To get our best rate on share dealing, you just need to trade 3 or more times in your share dealing account in the previous calendar month. Our standard rate is £10 per trade. See our full share dealing costs.

Spread betting is commission and tax-free, and the only charge is the spread we wrap around the stock price when you buy and sell. CFD trading costs $15 on either side of the trade.

Remember that spread bets and CFDs are leveraged, which means that you’ll only need to pay a percentage of the underlying market price to open a full position, but you could gain or lose money faster than you’d expect. You may even lose more than your initial deposit. See our full trading costs.

Find out more about IPO trading with us, or learn how to take a position before, during, and after an IPO.

Footnotes:

¹ CNN, 2021
² Oberlo, 2022