On November 12, 2020 Instacart, the US grocery delivery app with 200K shoppers, has filed confidentially IPO documents, according to people familiar with the matter. Instacart could target a valuation of between $30 billion.

  • Detailed instructions how to participate in Instacart IPO (pre-IPO, offering price) see belowπŸ‘‡
Instacart Initial Public Offering IPO. Image source: Instacart.com

What is an IPO and how it works

IPO is a process of offering shares of a private corporation to the public in a new stock issuance. Why go public? The primary benefit of going public is easier access to capital.

To go public, a company must have a track record of growth and other favorable results and hire an investment bank to come in and underwrite the IPO. The underwriters (Instacart has picked Goldman Sachs) also performed due diligence and verified financial information and business model.

Once the paperwork done, the company sells the stock to institutional investors. When the initial block of shares has been sold, the company sets an initial price and date for the stock to begin trading on a stock exchange.

Financial Indicators before Instacart IPO

In 2020, according to a Bloomberg report, Instacart's total amount of sales reached $35B. It is ranked third after Walmart and Amazon by popularity among the grocery delivery services. In August 2020, the company's sales rose by 234% compared to the same period last year, as Second Measure reports.

The latest investment round, which occurred in 2020, brought $225M to Instacart.

The investor list includes the following companies:

  • Tiger Global Management;
  • G Squared;
  • Dragoneer Investment Group;
  • Kleiner Perkins;
  • Thrive Capital;
  • Canaan Partners;
  • DST Global;
  • Sequoia Capital.

Since its inception, the company raised $2.17B. As of October 2020, Instacart is valued at $17.71B, with an approximate stock price of $60 per share. Ahead of the IPO, however, the value may well increase to $30B.

Instacart IPO and Target Market

With more capital raised and the IPO, Instacart will get even more boost. Even in case the profits and the number of customers do not go up that much after the lockdown is over, there are still opportunities to earn with ads and partnerships.

The online delivery market is currently worth at least $1T, having increased by 10% during the pandemic. This is almost three times more than in 2019.

According to the Data Insight analysis, the ecommerce market might be growing by 33.29% annually until 2024. Without taking the pandemic into account, it is less, 26.60% per annum, but that's still a very good number.

Currently, Instacart offers monthly and annual subscriptions to every customer, with the prices ranging from$9.99 to $99.00. The commission paid by the partner stores amounts to 10% of the goods purchased.

Please note that Instacart currently is a private company and cannot be invested in by members of the public. You may however register your interest and we will notify you when a security prospectus becomes available and the opportunity to invest arises.

How to Buy Instacart Stocks Before the IPO (Offering Price)

In the past, IPOs as highly profitable investments were available only to the privileged customers of the leading brokerage firms and it was challenging for retail investors to gain access. You couldn't buy shares paying the price set by the company and you had to wait until the shares actually start trading on the public stock market at whatever stock price supply and demand allows.

Technologies and marketplaces changed the rules of the game, now regular investors can get pre-IPO shares. To participate in Instacart IPO you need to use an IPO investing app like Freedom Finance (NASDAQ: FRHC), TD Ameritrade or Fidelity. They give its customers access to IPOs and secondary offerings through their existing brokerage account. Also you can buy Instacart shares when the company goes public via a commission-free trading app like eToro.

🚨 Detailed Instructions How to Participate in the Instacart IPO before public trading:

Below we share the instruction how to participate in the approaching Instacart IPO using Freedom Finance (Tradernet platform). Β This marketplace is chosen as an example because Instacart is already listed on this platform.

  • Pros: most high-profile IPOs are available for participation via Freedom Finance, no eligibility requirements, no number of previous trades needed and low minimum investment amount for participating in an IPO.
  • Cons: the user interface of the platform is a bit outdated.

*** Freedom Finance services are NOT available to US citizens and residents.

  1. Apply for a Freedom Finance account β€” you need to prepare your identity document and a document confirming the address of residence (utility bill). The verification process is very fast, it will take 2 minutes to create your account.
  2. Deposit your account β€” to participate in an IPO, your account must have available funds in the amount you send IPO application for.
  3. Wait for a request to participate in the IPO Β β€” a few days before IPO date you will get a notification (email and SMS text message) from Freedom Finance. You will have about 48 hours to apply for the IPO.
  4. Submit a request to participate in the IPO β€” when you get a notification that you can apply to buy shares, go to IPO section of the platform > you will see the IPO listing with the share price set by the underwriter > click Participate in the IPO > input the amount you want to invest > Send your application. Note: Before the book closing, a request can be withdrawn. At the time of the book closing, 1 day before the start of the exchange trading, the specified amount will be blocked on the account.
  5. Wait for allocation β€” The actual number of stocks purchased during an IPO depends on supply and demand. The higher underwriter reserves the right to partial execution of collective applications. So if the demand is high you may get less than you applied for. Of course, you will only pay for the shares purchased. The rest of the funds will be returned to your account.
  6. Start of trading β€” With the beginning of the public trading on the stock exchange, the purchased shares will appear on the account and a lock-up period will startβ€” a 93-day period of prohibition on sale. You can’t sell stocks, but you can track their current value and growth indicators in your personal member area and a trading terminal.
  7. Closing your trade β€” At the end of the 93 days lock-up period, you will be able to manage your stocks at your discretion β€” leave in the portfolio or sell and withdraw money or transfer the stocks to another depository/ broker in your name. This can be done in your account by clicking the β€˜Sell’ button next to the name of the security. In this case, a commission of 0.5% of the amount of the sale transaction is charged.

When is the Instacart IPO date

Instacart will announce IPO date early in 2021.

We will update when the exact Instacart date IPO is known – if you want to get notified please subscribe for updates here.

What is Instacart IPO price range?

The price is not defined yet.

We will update when the Instacart IPO offering price is known – if you want to get notified please subscribe for updates here.

Instruction How to Invest in Instacart after the IPO date (opening price)?

After the IPO you can buy Instacart stocks via a commission-free trading app like eToro on the first trading day.

  1. Register here
  2. Fund your account
  3. On the first trading day type into the search Instacart and click β€œTrade”
  4. Choose β€œBuy” and enter your amount

In what currency Instacart IPO and post-IPO shares will be traded?

The Instacart IPO and stock trading currency will be USD.

If you have funds in another currency the cheapest way to convert your currency is to use the mid-market rate (that’s the one you’ll find on Google) which can be done via a fintech service like Transferwise. Banks may add hidden markups to their exchange rates - charging you more without your knowledge. And if they have a fee, they charge you twice. TransferWise never hides fees in the exchange rate.

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IPO Calendar 2021
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