"IPO Momentum Builds: Instacart Surges Double Digits on First Day Following Arm"

Instacart, a grocery delivery company known as the "American version of Market Kurly," is showing double-digit gains on its first day of trading on the New York Stock Exchange on the 19th (local time). Following the British semiconductor design company Arm, Instacart's dazzling debut is adding momentum to the long-frozen initial public offering (IPO) market rebound.

[Image source=AP Yonhap News]

On that day, Instacart's stock opened on Nasdaq at $42 per share, more than 40% above the offering price of $30. As of 2:40 p.m., the stock was trading around $36.5 per share, up 21.7%. During the session, it soared as high as $42.95 before narrowing its gains.

Instacart's market capitalization also exceeded $10 billion by a wide margin. Local media reported that its fully diluted valuation is over $12.5 billion. Although this is far below the estimated $39 billion valuation at the beginning of 2021 during the height of the pandemic, it surpasses the scale anticipated by the market ahead of this listing. Instacart raised $660 million through this IPO. Major investors include Sequoia Capital and D1 Capital Partners.

Founded in 2012, Instacart supplies groceries to more than 80,000 retail chain stores in the U.S., including Kroger and Costco. In the second quarter of this year, it recorded a net profit of $114 million, an increase from $8 million a year earlier. Fidji Simo, Instacart's CEO, expressed confidence in growth, stating, "(Instacart is) at the center of a large-scale digital transformation," and "the more people shop online in the future, the more than double our online dominance can grow." According to documents released by Instacart, the online sales share in the grocery market currently accounts for only about 12%. Instacart also views the advertising market as a growth driver. The advertising segment accounted for 28% of Instacart's revenue in the first half of this year.

[Image source=AFP Yonhap News]

Instacart's listing is particularly notable as it occurred less than a week after Arm, considered a major IPO in the second half of the year, went public. This could serve as an additional revival signal for the IPO market, which had been frozen due to the Federal Reserve's (Fed) aggressive tightening measures. Arm, which debuted on Nasdaq last week, surged 25% on its first day, confirming strong investor interest. However, its stock price later declined, reducing the gains.

Currently, IPO experts evaluate that Instacart, unlike Arm, being a first-time listing, could serve as a better indicator of the IPO market's revival. There is also analysis that the mood for Klaviyo, which is scheduled to go public the next day, could be influenced by Instacart's performance on this day. Klaviyo is deciding its offering price on this day. German shoe manufacturer Birkenstock and Vietnam-based internet startup VNG are also preparing for U.S. listings.

Bloomberg News reported, "Instacart surged as much as 43% intraday on its first day of trading, adding momentum to the IPO market rebound," and "the successful IPO of Instacart, a startup backed by venture capital, could open the market for other companies." The Wall Street Journal (WSJ) also described it as a "signal of the IPO market awakening again."

This content was produced with the assistance of AI translation services.