Instacart debuts on the Nasdaq exchange. First major IPO with venture capital funds since 2021

Shares of food delivery company Instacart rose 12% on the first day of trading on the Nasdaq. The IPO valued the company at approximately $11 billion. The public offering was the first major venture-backed IPO since late 2021.

Instacart’s stock rose 40% from its initial price of $30, but declined throughout the day. Still, the fairly successful offering may encourage other late-stage startups to embark on plans to go public after a nearly two-year pause in IPOs.

Instacart has been around for a decade and has raised about $2.9 billion from venture capitalists. The company’s largest shareholder is Sequoia Capital, which holds a 15% stake. Co-founder and former CEO Apoorva Mehta owns about $800 million worth of shares. D1 Capital Partners, Andreessen Horowitz, Kleiner Perkins, Coatue and Tiger Global Management, are also venture capital investors in Instacart.

Instacart is one of more than 1,400 highly valued “unicorn” startups that have raised a total of about $900 billion from venture capitalists. The trajectory of this product platform illustrates the rocky path taken by late-stage startups in recent years. The company last raised funding in 2021, at the peak of the funding boom, with a high valuation of $39 billion. But as pandemic-era consumer spending has faded, Instacart has repeatedly lowered its internal valuation, most recently to $13 billion.

Still, its public market debut could restore investor confidence in new tech offerings, revitalize the late-stage funding market and encourage more highly valued startups to go public.

Other startups that may go public soon include marketing company Klaviyo, which also plans to go public this month, and peer-to-peer car rental platform Turo, which recently submitted updated IPO plans. All eyes will also be on companies like corporate travel platform Navan (formerly TripActions) and online discussion forum Reddit, which filed IPO plans in 2021 or 2022, before the market paused to see if they would resume filings.

Instacart’s performance on Nasdaq will be watched especially closely given that many of the 2021 IPOs did not result in much success as public companies – nearly half of the 171 companies that went public in 2021 with billion-dollar valuations are now worth less than $500 million.

Our fund is currently actively following the dynamics of venture capital companies and we are confident that we will see new large public offerings in the near future.

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