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How To Invest In Instacart IPO: Buy Instacart Stock

Conor Scott, CFA| Updated September 23rd, 2022
Invest in Instacart IPO

An official date for the Instacart IPO remains to be announced, yet the company did quietly file for an initial public offering with the SEC earlier this year. In market terms, Instacart is actively “testing the waters” to gauge general investor interest despite a very tough 2022. This suggests further news and possibly an IPO by late 2022

However, Instacart recently slashed its valuation by nearly 40% to 24 billion USD, down from 39 billion USD. The S&P 500 and Nasdaq bear markets of 2022 weighed upon investor sentiment for growth-oriented tech stocks, such as Instacart. Rampant inflation and expected interest rate increases effectively cooled the tech rally going into this year. 

Likely, its IPO will list on the New York Stock Exchange (NYSE) or Nasdaq exchange. The latter exchange in particular caters to technology-focused investors who may want to invest in Instacart’s IPO. 

In this article, we will help clarify all the information about the Instacart IPO: its date, how to buy Instacart’s IPO, and the stock itself. 

What is Instacart?

Founded in 2012 and headquartered in San Francisco, Instacart provides online grocery shopping and delivery services, and is known for its intuitive app. 

In 2013, Instacart introduced a low-fee subscription model enabling unlimited free deliveries. In 2014, the company expanded to 10 additional metropolitan centers, including Los Angeles, New York City, and Portland. In 2017, their second major expansion went nationwide and into Canada. And in 2022, they included new verticals such as beauty, electronics, and pets.  

Earlier in 2022, the company launched “Instacart Platform,” providing scale and consumer reach to smaller retailers outside of larger stores or grocery franchises. 

Their strategy continues to be one of market share dominance and hyper-growth as an early mover. However, the market remains slightly saturated with names such as: Grubhub, DoorDash, Seamless, Uber Eats, Postmates, Walmart, and so on. 

Yet Instacart controls roughly 25% of the online grocery market in the USA, according to an analyst from investment firm Baird. 

When Is Instacart’s IPO Date?

Likely due to the recent cuts in fintech company valuations by virtue of 2022’s bear markets, the company has not yet provided a finite IPO date. However, a reasonable market estimation is by late 2022 or early 2023. This could change pursuant to the direction of interest rate hikes from the Federal Reserve and inflation. IPOs are unlikely to occur during a prolonged bear market. 

The company’s incredible rise from launch to 24 billion USD in ten years and its market dominance make it a hotly anticipated IPO. But investors must continue to wait as the startup observes the market and any possible recovery. 

Its major investors include: 

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

A top-tier list such as the above suggests that it receives substantial advice and guidance. Further, it has no urgent need of cash, particularly as it reportedly has over 1 billion USD in cash reserves.

How to Order Instacart Stock Before the IPO

Yes, you can order Instacart shares before the IPO. This is known as a “pre-placement.” In theory, several brokers may allow you to do just that. However, the only one which has already announced it will make an effort to give access to Instacart IPO is Freedom24. Historically, it gets an allocation for IPO-priced stocks due to the partnerships with leading banks and underwriters since 2012.

Among other brokers, TradeStation has not announced if and when it will become available but seems open to it since they offer access to US IPOs. Please take a look at both:

1# Freedom24

How To Invest In Instacart IPO: Buy Instacart Stock 1
Visit Freedom24
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Freedom24 at a glance

Pre-IPO Placement
Minimum amount for IPO participation$2,000
Other ProductsStocks, ETFs, Bonds, Futures and Options
RegulatorsCySEC, BaFin, SEC
Supported CountriesEuropean Union (no US, UK or Canadian Investors)

Founded in 2008, Freedom Finance, the official company name of Freedom24, has already offered to its 400,000+ worldwide clients participation in 280+ IPOs, including 40,000+ trade stocks, 1,500+ ETFs, 1,000+ US Stock Options, and 147,000+ bonds on the largest exchanges in Europe, Asia, and the US.

With Freedom24, the process to participate before the IPOs feels incredibly straightforward:

  1. Open an account and complete the verification process (it takes 10 minutes in total)
  2. Top up your account with a minimum of 2,000 USD (the minimum for an IPO request);
  3. Submit a request for the available IPO stocks before their respective IPO dates;
  4. Freedom24 automatically credits your account with those shares purchased by them on your behalf (“oversubscribed” IPOs may make it difficult for your orders to be filled completely);
  5. Sell your stocks after the 93-day lock-up period or purchase a forward sale contract through Freedom24 to lock your gains before the 93 days period.
Instacart IPO Freedom24

Freedom24 | Instacart IPO

To invest in Instacart stocks at IPO price, you will technically become a Freedom Finance client. Nothing to worry about here, that’s simply the name of the broker running the platform Freedom24.

Want to know more about Freedom24? Check our Freedom24 review.

2# TradeStation

How To Invest In Instacart IPO: Buy Instacart Stock 2
Visit TradeStation

TradeStation at a glance

Pre-IPO Placement
Minimum amount for IPO participation$500
Other ProductsStocks, ETFs, Bonds, Futures, Options, Mutual Funds and Crypto
RegulatorsSEC, FINRA
Supported CountriesWorldwide - including the US and UK (Canadians not allowed)

Founded in 1982, TradeStation is a US broker committed to offering you the best trading experience within their rewarded platforms and brokerage services. You can trade stocks, ETFs, options, futures, and crypto with competitive pricing models.

With TradeStation, you must follow these steps:

  1. Open an account with a minimum of 500 USD;
  2. Download the ClickIPO app (Available both on iOS and Android);
  3. Register on ClickIPO’s trading platform and select TradeStation as your broker;
  4. Link your TradeStation account in the “My Account” section of the ClickIPO app

For US residents, you have zero commission trades (including the IPO stocks). For international investors, please consult their pricing here.

tradestation IPO

TradeStation | IPOs

There is no guarantee that TradeStation will offer instacart’ IPO, still, the optionality is there. We encourage you to follow the company and wait for their official announcement. After that, ask TradeStation if they will offer it.

Is Investing in IPOs Profitable?

While this often boils down to knowledge and investing experience, you can earn a profit by investing in IPOsBetween the two brokers mentioned above, Freedom24 is the only one that provides statistical figures for its past IPO offering. So, we will present it here as a result.

Freedom24 has so far provided 265 companies, in stocks of which approved clients have been able to invest at IPO prices. On average, they earned a 53% return by the end of the stock’s lock-up period.

Freedom24

Freedom24 | Past IPO Outcomes

We strongly suggest entering your email (no strings attached!) to receive the latest statistics from Freedom24. 

Is Instacart IPO a Good Investment?

Generally, investing in an IPO is riskier than investing in a stock already known to the public market, either through an American exchange like the NYSE or a European exchange like the LSE. 

However, there remain a few essential items to have on your analytical checklist no matter the stock or sector. 

  1. Gross revenue (“top line”) 
  2. The revenue drivers, such as active user or member growth
  3. Profit margins, often EBITDA as a percentage of top line; EBITDA means “earnings before interest, tax, depreciation, and amortization”
  4. Its private valuation growth, earned whenever a private capital raising with major investors, hedge funds, or banks occurs
  5. Cumulative funding and current (pre-IPO) investors 
  6. The management team
  7. Its competitors

If an “IPO Filing” has already occurred, a great place to start is taking the time to read through any stock’s original prospectus available on SEC. This helps cut through the noise and hype typically surrounding an IPO. 

Finding such information prior to a public IPO filing remains difficult, yet reputable trade journals such as Forbes, WSJ, Crunchbase, or TechCrunch provide meaningful estimates. 

With respect to Instacart’s IPO, the below estimates are currently available, noting it is in USD:

  1. Revenue (2021): 1.8 billion, a 20% increase over 2020’s 1.5 billion
  2. Customer count (2020): 9.6 million active users 
  3. Partnering companies (2021): 750, a 25% increase over 2020
  4. Private valuation: 24 billion, a 40% decrease from the last funding round
  5. Total cumulative funding: 2.2 billion
  6. Investors include: substantial; please see above 
  7. Management: CEO Fidji Simo was previously Vice President and Head of the Facebook App at Facebook (now Meta)
  8. Close parallels include Walmart and Grubhub, in addition to several other competitors

And there you have a quick snapshot of Instacart. It’s important to remember that you want to see consistent growth over several years (at least three) without any breaks in momentum. 

In this scenario where a company reveals limited information, particularly concerning their income statement and balance sheet, it’s also vital to track their customer growth and investor base. If multiple independent trade journals or conferences also rate their products highly, the company could be a winner. 

However, a clear hesitation to reveal financials suggests an inordinate amount of spending, which almost always draws intense scrutiny. This data becomes available in an IPO filing.

The Bottom Line

We’re excited about Instacart’s IPO. It has garnered an incredible valuation at 24 billion USD in ten years and is almost earning two billion a year in top-line revenue. 

It’s clear the company tapped into a new market captivating the likes of Amazon and Walmart. While the “smart money” follows Instacart, investors should never turn complacent. Any growth story needs consistency and solid financials. 

Instacart might provide the +50% return you’re looking for, but we suggest you conduct your own research or sit down with a professional advisor. Why not take a look at all of Freedom24’s upcoming IPOs and make a list? Or simply wait for any announcement from TradeStation and then decide which broker to use? It’s your call.

Other FAQs

What is an IPO, and how does it work?

An “IPO” is an initial public offering. As it sounds, it marks a stock’s first trading day on a relevant and public exchange. Most IPOs are crowded or “oversubscribed,” making it almost impossible to receive the actual initial price unless you opt for a pre-order through a platform like Freedom24 or TradeStation.

Is Instacart a public company?

Instacart is currently a private company. Pre-ordering via Freedom24 is not available at least until the IPO date is announced. 

How does Instacart make money?

Instacart earns revenue through providing subscriptions to unlimited free deliveries, and by charging partnering companies a 10% commission. 

How can I find Instacart’s IPO prospectus?

After an IPO filing occurs, the prospectus is available to the public through the US SEC for stocks trading on an American exchange. 

When will the Instacart IPO happen?

While this remains the decision of Instacart, we expect to receive further clarity on its IPO date by late 2022. The current S&P 500 and Nasdaq bear markets are also discouraging new IPOs. 

Can you invest in Instacart’s IPO?

Yes, Freedom24 or TradeStation are great platforms for doing just that.

What other IPOs are coming soon?

Some upcoming IPOs include the Reddit IPO, Discord IPO, Netskope IPO, Stripe IPO, Databricks IPO, and Porsche IPO.

Conor Scott, CFA
Contributor

Conor is a CFA charterholder who has been active in the wealth management industry since 2012, continuously researching the latest developments affecting portfolio management and cryptocurrency.

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