Instacart IPO Valuation: The Only Lower Price at the Grocery Store?

Maplebear Inc (dba Instacart) was founded a decade ago and introduced a new model for online grocery shopping and convenient home delivery. The company has been wildly successful and offers retail enablement solutions for more than 1,400 retail banners across more than 80,000 locations.

After a Series A and Series B round in 2013 and 2014 (raising approximately $54mm), Instacart hit Unicorn status with a $2.1bn post-money valuation, which qualified it to be included in the Prime Unicorn Index in Q1 2015. Since joining the Index, Instacart has raised an additional $2.3bn over seven rounds.

In March 2021, the company raised $265mm in its most recent round, which valued the company at $32.9bn at a preferred price per share of $125. This round was led by Andreessen Horowitz and included participation from Sequoia, D1, Fidelity, and T. Rowe Price. Investors in previous rounds included Valiant Capital, General Catalyst, Khosla Ventures, Kleiner Perkins, and Y Combinator Continuity Fund, among others.

On August 26, 2023, the company filed to go public on the Nasdaq stock exchange under the ticker symbol of NASDAQ: CART. In the offering, the company indicated its plans to sell 14,100,000 shares, and current shareholders intend to sell 7,900,000 at a price range of $26 to $28 per share, with the company hoping to achieve a valuation of between $8.6-9.4bn… which is a far cry from its last private round of $32.9bn.

Since the company’s last private financing in March 2021, the Prime Unicorn Index team has been closely monitoring Instacart’s Employee Plan Exemption Notices (EPENs).  In fact, the company has filed four of them during this time, leading to the company’s value being marked down twice in the Prime Unicorn Index.

The first markdown occurred on April 6, 2022, when Instacart disclosed a common share price of $75, indicating a 36.35% decrease from its previous common share price of $117.84, disclosed by an EPEN filing on August 17, 2021.

The Prime Unicorn Index most recently marked down the value of Instacart following an EPEN filing on March 14, 2023, which disclosed a common share price of $30.18, indicating a 59.76% decrease in the value of its common shares that were granted to company executives since its last EPEN on April 6, 2022. This valued the company at $8.4bn on a post-money valuation basis, down a whopping 74.5% from its Series I valuation of $32.9bn. 

Key Takeaway:  The Prime Unicorn Index valued Instacart at $8.4bn as of this quarter.  This post-money valuation is eerily similar to the soon-to-come and hoped-for IPO price.  With the advent of the proposed Private Fund Advisors regulations, the Gensler-led SEC is calling for more transparency in price discovery for institutional investors.  Getting real-time valuations can be difficult, if not impossible—but it’s important to protect against board-level liability.  If this doesn’t concern you—just ask the Directors of JUUL. 

By leveraging a combination of Preferred share and Common share pricing, as well as secondary share transfer pricing, the Prime Unicorn Index is once again proving it’s the standard bearer for valuing and benchmarking private companies.

If you are a secondary market participant—we can assist with price discovery and help buyers and sellers find a fair value through utilizing our benchmark.  If you are an institutional investor, private company CFO (or Board member), we can help avoid liability and comply with fiduciary duties on price discovery and benchmarking.   Learn more about how we can help you here.