To The Moon

$Instacart, Inc. (Maplebear Inc.)(CART)$ has once again raised its IPO price to $30 per share, at the expected upper limit, valuing the company at $9.9 billion on a fully diluted basis. This is further evidence of the IPO market's recovery.

Last week, chip design company ARM Holdings Ltd (ARM) made its debut and saw a significant surge, bringing excitement back to the long-dormant IPO market. If CART's stock performs well, it may pave the way for more startups to go public.

Investors may be ready to venture back into the IPO world, but the current environment has made them price-sensitive, unlike the boom of 2021. Many IPO stocks from 2020 and 2021 have traded below their initial prices, potentially leading to losses for funds that invested in these offerings.

Instacart's target valuation is far below the $39 billion it raised in its 2021 funding round.

The success of Arm and Instacart, as well as the market automation platform $Klaviyo, Inc.(KVYO)$ , whose IPO is expected to be priced on Tuesday, may open doors for other companies like fashion shoe designer Birkenstock, which is expected to go public in October 2023. Bankers and lawyers suggest that some other companies are also preparing stock issuance documents later this year, though any large-scale IPO wave is more likely to occur in early 2024, including OpenAI.

Founded in 2012, Instacart is often described as the American version of "JD Daojia" $JD.com(JD)$ primarily responsible for delivering groceries from stores to people's homes. The company has raised over $2 billion in venture capital and has long stated its intention to go public. Under the leadership of CEO Fidji Simo, Instacart has expanded beyond its core grocery delivery business into areas like advertising.

Instacart positions itself as a grocery tech company that can assist food retailers in times of industry transformation, providing delivery, in-store technology, advertising, and data services that are challenging to build from scratch.

In its filings, Instacart stated that its revenue for the first half of this year grew approximately 31% compared to the same period last year, reaching around $1.5 billion. Growth in its core delivery business has slowed, with order volume essentially flat, while revenue from advertising and other businesses grew by approximately 24%.

The company achieved a profit of $242 million, which is an increase compared to a net loss of $74 million one year ago.

Instacart has secured commitments of $400 million from investors for its initial public offering $Pepsi(PEP)$ has also agreed to purchase $175 million in convertible preferred stock in a concurrent private equity transaction.

The company, along with former executives and senior employees, is selling less than 10% of the company's shares in the IPO. Some of the funds raised by Instacart will be used to cover taxes and costs related to stock awards to employees with restricted stock units or bonuses.