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In a Unique Move, Instacart to Sell Employees’ Shares in IPO
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In a Unique Move, Instacart to Sell Employees’ Shares in IPO

Story Highlights

Instacart prepares for a unique IPO, which involves most of the IPO funding from the sale of employee shares.

Instacart, a well-known online grocery service name among American households, has decided to move ahead with its fourth-quarter IPO plan. The Wall Street Journal reported that rather than typically looking to raise a large amount of capital through IPO listings, the company intends to allow its employees to sell their shares. These shares will constitute the majority of listings.

The company’s move to keep employee interests first, despite running the risk of raising lesser capital, thanks to the current tech IPO draught, is commendable. This unique IPO move will not only help retain existing talent but also attract new employees.

Per the terms, employees will have a chance to sell their accumulated company shares to investors at a pre-approved price ahead of the IPO.

Toward the end of last year, numerous companies were preparing to hit the IPO market in 2022. However, due to multiple blows that brought down tech stocks this year, including interest rate hikes, inflation, and the like, the IPO plans of many stalled. Among those who gave into the fear of a low IPO pricing was food-delivery player Gopuff, online marketplace StockX, and $95-billion payments provider Stripe.

How Much Is Instacart Worth?

Founded in 2012, Instacart raised more than $254 million in 2014. It last raised $265 million in March 2021. As of July 2022, Instacart investor Capital Group valued the company at $14.7 billion.

Earlier this year, the company said that it held more than $1 billion in cash and marketable securities.

In the second quarter of 2022, Instacart broke into net profit, which further motivated it to defy the norm and go ahead with its plan. Intensifying competition from DoorDash (NYSE:DASH) and Uber (NYSE:UBER) and high inflation did not deter Instacart from achieving solid second-quarter results, which makes it even more worthy of investor attention.

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